27. (Rework) Auto Luster Inc. manufactures two-gallon tubs of car polish 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 production process. The following information is available for August 2001:

Beginning inventory (30% complete as to conversion) 750 units Started during month 17,250 units Completed during month 15,000 units Defective units (100% complete as to conversion) 1,800 units Ending inventory (70% complete as to conversion) 1,200 units Actual August production costs (including those for beginning inventory) were

$126,000 for direct material and $40,572 for conversion. In addition, the rework 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?