Compute equivalent units of production, compute cost per equivalent

unit, and record abnormal spoilage. (Obj. 3). Denver Decorative

Tray Company adds materials at the start of production in the

Forming Department. Data related to materials used in October 19X9

are as follows:

Units

30CO^;OOr'

40,000

41,000

100

11,900

EXERCISE 16-8

Work in process on October 1

Started in October

Completed and transferred out in October

Abnormal spoilage

Work in process on October 31

Materials in beginning work in process inventory, $48,000

Cost of materials added during month, $160,000

a. Compute the equivalent units of production for materials for the

month.

b. Compute the cost per equivalent unit of production for materials

for the month.

c. Give the general journal entry at the end of the month to remove

from work in process the materials costs related to the units of abnormal

loss. (Ignore labor, overhead, and prior department costs.)

LO.1