E5.29 LO 5.4 Physical flow and equivalent units including spoilage: manufacturer Bradbrook Corporation manufactures cardboard boxes. In the year just completed the following results were recorded: Work in process, 1 January Units 37 500 Work in process, 31 December 30 000 Percentage of completion with respect to conversion 50% 40%

During the year, 150000 boxes were started in production. Of these, 15000 were rejected at the quality inspection process, which occurs two-thirds of the way through the production process. All materials are added at the beginning of the production process and conversion costs are incurred uniformly throughout the process. Required 1. Prepare a schedule analysing the physical flow of units and calculating the equivalent units of both direct material and conversion. Use weighted average process costing. 2. How would your approach differ using the FIFO method?