1)Samantha's Office Supplies manufactures desk organizers 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 as units are placed into production. After inspection, some units are spoiled due to undetectable material defects. Spoiled units generally constitute 3% of the good units. Data provided for February 2017 are as follows:

WIP, beginning inventory 2/1/2017 51,700 units

Direct materials (100% complete)

Conversion costs (60% complete)

Started during February 170,300 units

Completed and transferred out 180,800 units

WIP, ending inventory 2/28/2017 26,000 units

Direct materials (100% complete)

Conversion costs (25% complete)

Costs:

WIP, beginning inventory:

Direct materials $280,000

Conversion costs 80,000

Direct materials added 408,300

Conversion costs added 264,100

What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent.)

A) $20,882; $37,638

B) $13,004; $37,638

C) $14,200; $13,004

D) $25,025; $7879

I GOT THE ANSWER IS A. BUT HOW TO GET IT?

2) Springfield Sign Shop manufactures only specific orders. It uses a standard cost system. During one large order for the airport authority, an unusual number of signs were spoiled. The normal spoilage rate is 10% of units started. The point of first inspection is half way through the process, the second is three-fourths through the process, and the final inspection is at the end of the process. Other information about the job is as follows:

Signs started 3,000

Signs spoiled 450

Direct materials put into process at beginning $ 60,000

Conversion costs for job $120,000

Standard direct material costs per sign $27

Standard conversion cost per sign $54

Average point of spoilage is the 3/4 completion point

Average current disposal cost per spoiled sign $15

Required:

Make necessary journal entries to record all spoilage.

The Answer: Average cost per sign when spoiled:

Direct material cost $27.00

Conversion ($54 3/4) 40.50

Total cost per spoiled sign $67.50

Abnormal spoilage = Total spoilage - normal spoilage

= 450 - 300

= 150

Materials Control (450 $15) 6,750

Loss from Abnormal Spoilage (150 $52.50) 7,875

Manufacturing Overhead Control (300 $52.50) 15,750

Work-in-Process Control, airport job (450 $67.50) 30,375

I GOT THE ANSWER BUT HOW TO GET $52.50 FOR LOSS FROM ABNORMAL SPOILAGE.