Horngren's Cost Accounting, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134476032
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 18, Problem 18.39P
Physical units, inspection at various levels of completion, weighted-average
At the start of November 2017, SunEnergy’s assembly department had 2,400 panels in beginning work in process, which were 100% complete for materials and 40% complete for conversion costs. An additional 12,000 units were started in the department in November, and 3,600 units remain in work in process at the end of the month. These unfinished units are 100% complete for materials and 70% complete for conversion costs.
The assembly department had 1,800 spoiled units in November. Because of the difficulty of keeping moisture out of the modules and sealing the photovoltaic cells between layers of glass, normal spoilage is approximately 12% of good units. The department’s costs for the month of November are as follows:
| Beginning WIP | Costs Incurred During Period | |
| Direct materials costs | $ 76,800 | $ 240,000 |
| Conversion costs | 123,000 | 1,200,000 |
- 1. Using the format on page 728, compute the normal and abnormal spoilage in units for November, assuming the inspection point is at (a) the 30% stage of completion, (b) the 60% stage of completion, and (c) the 100% stage of completion.
Required
- 2. Refer to your answer in requirement 1. Why are there different amounts of normal and abnormal spoilage at different inspection points?
- 3. Now assume that the assembly department inspects at the 60% stage of completion. Using the weighted-average method, calculate the cost of units transferred out, the cost of abnormal spoilage, and the cost of ending inventory for the assembly department in November.
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Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2017 are presented below.
Production Data
June
Beginning work in process units
0
Units started into production
25,080
Ending work in process units
2,280
Percent complete—ending inventory
40
%
Cost Data
Materials
$225,720
Labor
61,104
Overhead
128,592
Total
$415,416
Prepare a schedule showing physical units of production.
Physical units
Units to be accounted for
Work in process, June 1…
Compute the unit costs of production.
Unit Costs
Materials
Conversion Costs
Total Unit Cost
Arona Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are
attached to a canoe- shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arona uses a
weighted-average process cost system to collect costs in both departments.
All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 30 canoes
in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 20 canoes in process that were 40% complete with
respect to conversion cost. During July, the Fabrication Department completed 76 canoes and transferred them to the Waterproofing Department.
What are the Fabrication Department's equivalent units of production related to conversion costs for July?
Multiple Choice
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Chapter 18 Solutions
Horngren's Cost Accounting, Student Value Edition (16th Edition)
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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