LaToya Company produces door pulls, which are inspected at the end of production. Spoilage may occur because the door pull is improperly stamped or molded. Any spoilage in excess of 3 percent of the completed good units is considered abnormal. Direct material is added at the start of production. Labor and overhead are incurred evenly throughout production.

The company's May 2010 production and cost data follow:

Beginning WIP Inventory (50% complete) ......... 5,600

Units started .......................74,400

Good units completed .................70,000

Ending WIP Inventory (1/3 complete) ............ 7,500

Calculate the equivalent units schedule, prepare a weighted average cost of production report, and assign all costs. LaToya extends both the normal and abnormal spoilage units in the EUP schedule to all cost components that have been incurred to the point of detection (100 percent completion). The cost of normal spoilage is attached to the units transferred to Finished Goods Inventory; the cost of abnormal spoilage is considered a periodloss.

Transcribed Image Text:

DM 6,400 74,400 $80,800 Conversion S 1,232 31,768 $33,000 Total $ 7,632 106,168 $113,800 Beginning inventory Current period Total