Question
18-29 LogicCo is a fast growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added
18-29 LogicCo is a fast growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. LogicCo uses the weighted average method of process costing.
Summary data for September 2017 are as follows:
Physical units | Direct materials | Conversion costs | |
Work in process, beginning inventory | 900 | $125,766 | $10,368 |
Degree of completion of beginning work in proces | 100% | 30% | |
Started during September | 2,754 | ||
Good units completed and transferred out during September | 2,500 | ||
Work in process, ending inventory | 490 | ||
Degree of completion | 100% | 10% | |
Total costs added during September | $619,650 | $253,098 | |
Normal spoilage as a percentage of good units | 15% | ||
Degree of completion of normal spoilage | 100% | 100% | |
Degree of completion of abnormal spoilage | 100% | 100% |
1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule.
2. Summarize the total costs to account for; calculate the cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
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