6-43..

6-43 Abnormal Spoilage APCO Company manufactures various lines of bicycles. Because of the high volume of each type of product, the company employs a process cost system using the weighted average method to determine unit costs. Bicycle parts are manufactured in the molding department. The parts are consolidated into a single bike unit in the molding depart- ment and transferred to the assembly department where they are partially assembled. After assembly the bicycle is sent to the packing department. Cost per unit data for the 20-inch dirt bike has been completed through the molding department. Annual cost and production figures for the assembly department are presented in the schedules at the bottom of the page. Defective bicycles are identified at an inspection point when the assembly labor process is 70% complete, all assembly material has been added at this point of the process. The normal rejection percentage for defective bicycles is 5% of the bicycles reaching the inspection point. Any defective bicycles over and above the 5% quota are considered as abnormal. All defective bikes are removed from the production process and destroyed. Assembly Department Cost Data Total Cost Transferred in from Molding Department Assembly of Dirt Bike Conversion Cost $ 11,930 236,590 $248.520$1,672.020 Assembly Material $ 6,660 96,840 Through Assembly $ 100,790 Prior period costs.$82,20 Current period costs ...1,237,800 Total costs ...$1.320,000 1.571230