Hebert Industries uses a weighted average process costing system. Management has specified that the normal loss from
Question:
Hebert Industries uses a weighted average process costing system. Management has specified that the normal loss from shrinkage cannot exceed 3 percent of the units started in a period. All raw material is added at the start of the production process. Spoilage is determined upon inspection at the end of the production process. March processing information follows.
a. How many total units are there to account for?
b. How many units were spoiled during processing? Of the spoiled units, how many should be treated as a normal loss? As an abnormal loss?
c. What are the equivalent units of production for direct material? For conversion?
d. How are costs associated with the company's normal spoilage handled?
e. How are costs associated with the company's abnormal spoilage handled?
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9781618533531
10th Edition
Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn