HORGREN'S COST ACCOUNTING
LATEST Edition
ISBN: 9781323676714
Author: Datar
Publisher: PEARSON EDUCATION (COLLEGE)
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Textbook Question
Chapter 18, Problem 18.20E
Normal and abnormal spoilage in units. The following data, in physical units, describe a grinding process for January:
| Work in process, beginning | 19,300 |
| Started during current period | 145,400 |
| To account for | 164,700 |
| Spoiled units | 12,000 |
| Good units completed and transferred out | 128,000 |
| Work in process, ending | 24,700 |
| Accounted for | 164,700 |
Inspection occurs at the 100% completion stage. Normal spoilage is 5% of the good units passing inspection.
- 1. Compute the normal and abnormal spoilage in units.
Required
- 2. Assume that the equivalent-unit cost of a spoiled unit is $8. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer.
Expert Solution & Answer
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Students have asked these similar questions
Watkins Company had the following production for the month:
Units
Work-in-process, beginning 6,000
Started during the month 24,000
Completed and transferred to finished goods 18,000
Spoilage incurred 3,000
Work-in-process, ending 9,000
Materials are added at the beginning of the process. As to conversion cost, work-in-process was 20% complete at the beginning and 70% complete at the end of the month. Spoilage is detected at the end of the process.
1. Using the weighted-average method, the equivalent units for the month, with respect to conversion cost, were:
2. Assume that the spoilage for the month included abnormal spoilage of 1,000 units, and that the total costs incurred to date for materials and conversion costs are $30,000 and $54,600, respectively. What is the amount…
The following information is available for Jones Company for April:
Started this month
80,000
units
Beginning WIP
(40% complete)
7,500
units
Normal spoilage (discrete)
1,100
units
Abnormal spoilage
900
units
Ending WIP
(70% complete)
13,000
units
Transferred out
72,500
units
Beginning Work in Process Costs:
Material
$10,400
Conversion
13,800
Current Costs:
Material
$120,000
Conversion
350,000
All materials are added at the start of production and the inspection point is at the end of the process.
The following information is available for Jones Company for April:
Started this month
80,000
units
Beginning WIP
(40% complete)
7,500
units
Normal spoilage (discrete)
1,100
units
Abnormal spoilage
900
units
Ending WIP
(70% complete)
13,000
units…
The following information is available for Twinny Corporation for the month of Ma:
Started in process units 320,000
WIP beginning (40% complete) 30,000
Normal spoilage(discrete) 4,400
Abnormal spoilage 3,600
WIP ending(70% complete) 52,000
Completed and transferred out 290,000
Cost data
WIP beginning cost:
Materials 41,600
Conversion 55,200
Current cost:
Materials 480,000
Conversion 1,400,000
All materials are added at the start of the process and the inspection point is at the end of the process.
Required: Prepare a cost of production report using FIFO and Weighted Average Method. (Use five decimal places to compute the unit cost).
Chapter 18 Solutions
HORGREN'S COST ACCOUNTING
Ch. 18 - Why is there an unmistakable trend in...Ch. 18 - Distinguish among spoilage, rework, and scrap.Ch. 18 - Normal spoilage is planned spoilage. Discuss.Ch. 18 - Costs of abnormal spoilage are losses. Explain.Ch. 18 - What has been regarded as normal spoilage in the...Ch. 18 - Units of abnormal spoilage are inferred rather...Ch. 18 - In accounting for spoiled units, we are dealing...Ch. 18 - Total input includes abnormal as well as normal...Ch. 18 - Prob. 18.9QCh. 18 - The unit cost of normal spoilage is the same as...
Ch. 18 - In job costing, the costs of normal spoilage that...Ch. 18 - The costs of rework are always charged to the...Ch. 18 - Abnormal rework costs should be charged to a loss...Ch. 18 - When is a company justified in inventorying scrap?Ch. 18 - How do managers use information about scrap?Ch. 18 - Prob. 18.16MCQCh. 18 - Which of the following is a TRUE statement...Ch. 18 - Healthy Dinners Co. produces frozen dinners for...Ch. 18 - Fresh Products, Inc. incurred the following costs...Ch. 18 - Normal and abnormal spoilage in units. The...Ch. 18 - Weighted-average method, spoilage, equivalent...Ch. 18 - Weighted-average method, assigning costs...Ch. 18 - FIFO method, spoilage, equivalent units. Refer to...Ch. 18 - FIFO method, assigning costs (continuation of...Ch. 18 - Weighted-average method, spoilage. LaCroix Company...Ch. 18 - FIFO method, spoilage. 1. Do Exercise 18-25 using...Ch. 18 - Spoilage, journal entries. Plastique produces...Ch. 18 - Recognition of loss from spoilage. Spheres Toys...Ch. 18 - Weighted-average method, spoilage. LogicCo is a...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Standard-costing method, spoilage. Refer to the...Ch. 18 - Spoilage and job costing. (L. Bamber) Barrett...Ch. 18 - Reworked units, costs of rework. Heyer Appliances...Ch. 18 - Scrap, job costing. The Russell Company has an...Ch. 18 - Weighted-average method, spoilage. World Class...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Weighted-average method, shipping department...Ch. 18 - FIFO method, shipping department (continuation of...Ch. 18 - Physical units, inspection at various levels of...Ch. 18 - Spoilage in job costing. Jellyfish Machine Shop is...Ch. 18 - Rework in job costing, journal entry (continuation...Ch. 18 - Scrap at time of sale or at time of production,...Ch. 18 - Physical units, inspection at various stages of...Ch. 18 - Weighted-average method, inspection at 80%...Ch. 18 - Job costing, classifying spoilage, ethics....
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