(Rework) Slick Shine Inc. manufactures two-gallon tubs of car wax for body shops. The company uses an actual cost, process costing system. All material is added at the beginning of production; labor and overhead are incurred evenly through the process. Defective units are identified through inspection at the end of the pro¬ duction process. The following information is available for March 1998:

Actual March production costs (including those for beginning inventory) were $126,000 for direct material and $40,572 for conversion. In addition, re¬ work cost to bring the 1,800 units up to specifications was $3,150 for material and $1,323 for conversion.

a. Determine the equivalent units of production using the weighted average method.

b. Assume that the rework is normal. Determine the cost per good unit for direct material and conversion.

c. Assume that the rework is normal. How would the rework cost be handled in a normal (rather than actual) costing system?

d. Assume that the rework is abnormal. Determine the cost per good unit for direct material and conversion. How is the rework cost recorded for financial statement purposes?LO1

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Beginning inventory (30% complete as to conversion) Started during month Completed during month Defective units (100% complete as to conversion) Ending inventory (70% complete as to conversion) 750 units 17,250 units 15,000 units 1,800 units 1,200 units