Question
17-23. Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single
17-23. Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place at 95% of the conversion process.. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Malikhain uses FIFO method. Data provided for March 2020 are as follows: WIP, beginning inventory 3/1/2020 30,000 units Direct materials (100% complete) Conversion costs (89.5% complete)
Started during March | 80,000 units |
Completed and transferred out WIP, ending inventory 3/31/2020 Direct materials (100% complete) Conversion costs (75% complete) Costs: | 86,000 units 20,000 units |
WIP, beginning inventory:
Direct materials | P 70,000 |
Conversion costs | 40,000 |
Direct materials added | 160,000 |
Conversion costs added 17. How many units are considered normal spoilage? | 120,000 |
18. How many units are considered abnormal spoilage 19. How much cost is associated with normal spoilage? 20. How much cost is associated with abnormal spoilage? 21. How much costs is allocated to the ending work-in-process inventory? 22. How much cost is allocated to transferred out units? 23. What is the journal entry to record the transfer of completed goods to finished goods?
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