FIFO, Spoiled and Lost Units (D. Grinnell). The Murphy Manufacturing Company manufactures a single product that is processed in five departments.

The following cost data are available for Dept. 3 for the month of July, 19_5:

Opening work-in-process inventory:

Cost transferred in from Dept. 2 $19,000 Dept. 3 labor cost 3,000 Current costs:

Cost transferred in during July from Dept. 2 $105,000 Dept. 3 material cost during July 36,800 Dept. 3 labor cost during July 42,800 Material used in Dept. 3 is added to the product at the end of the Dept.

3 process. Dept. 3 conversion costs are assumed to be incurred uniformly throughout the Dept. 3 process; manufacturing overhead is applied to product on the basis of 50 percent of labor cost.

The following represents production data for Dept. 3 for the month of Jiwlbs, WS:
Work in process (July 1) 18,000 units (4 completed)
Units transferred in during July from Dept. 2 111,000 units Good units completed during July 80,000 Spoiled units & 12,000 units Work in process (July 31) 28,000 units (% completed)
Spoiled units: Spoilage is detected by inspection upon completion of the product by Dept. 3. Normal spoilage is considered to be 10 percent of the good output. Further, normal spoilage is considered a cost of the good units completed while abnormal spoilage is written off as a loss.
Normal lost units: Units lost during processing are considered to be a normal occurrence unless the number of lost units exceeds 5 percent of total units accounted for (total units accounted for is equal to the sum of good units completed plus spoiled units plus units in ending inventory of work in process).
The cost of normal lost units is considered a cost of total units accounted for;
company accountants make no attempt to specifically determine or separately identify the cost of normal lost units (that is, the method of neglect is used in accounting for normal lost units).
Abnormal lost units: Lost units in excess of 5 percent are considered abnormal.
The cost of abnormal lost units is separately identified and written off as a loss. The company accountants follow the policy of assigning only transferred-in costs to abnormal lost units.
. Consistent with the F/FO method for treating product costs and consistent with the company’s treatment of spoilage and lost units, determine the following concerning Dept. 3 operations for the month of July:

a. Total loss (in dollars) due to abnormal spoilage.

b. Total loss (in dollars) due to abnormal lost units.

c. Total cost assigned to good units completed during July that is transferred out to Dept. 4.

d. Total cost assigned to the ending (July 31) work-in-process inventory. . How would your answers to requirement | above be influenced (indicate the total dollar effect) if the spoiled units could be sold for 25¢ each?