6-49 Welghted-Average Method: Transferred-in Costs; Spollage (Appendix) APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the company employs a process costing system using the weighted average method. Bicycle parts are manufactured in the molding department and then are consolidated into a single bike unit in the molding department and transferred to the assembly department where they are assembled. After assembly, the bicycle is sent to the packing department. Annual cost and production figures for the assembly department are pre- sented in the schedules below. Defective bicycles are identified at the inspection point when the assembly labor process is 70% com- plete; all assembly materials have been added at this point. The normal rejection rate for defective bicy cles is 5% of the bicycles reaching the inspection point. Any defective bicycles above the 5% quota ard considered to be abnormal. All defective bikes are removed from the production process and destroyed. Required 1. Compute the number of defective, or spoiled, bikes that are considered to be a normal spoilage. b. abnormal spoilage. Compute the equivalent units of production for the year for a. bicycles transferred in from the molding department. b. bicycles produced with regard to assembly materials. c. bicycles produced with regard to assembly conversion 3. Compute the cost per equivalent unit for the fully assembled bike 4. Compute the amount of the total production cost of $1.672.020 that will be associated with the following items. a normal spoiled units. b. good units completed in the assembly department. c. abnormal spoiled units. d. ending Work-in-Process Inventory in the assembly department 5. Describe how to present the applicable dollar amounts for the following items in the financial statements a. normal spoilage units. b. abnormal spoilage units. c. completed units transferred to the packing department Assembly Department Cost Data Transferred-in from Assembly Assembly Molding Department Materials Conversion $ 82,200 $ 6,660 $ 11,930 1,237,800 96,840 236,590 $1,320,000 $103.500 $248,520 Prior period costs Current period costs Total costs Total Cost of Bike through Assembly $ 100,790 1,571,230 $1,672,020 Assembly Department Production Data Percentage Complete Transferred Assembly Assembly Bicycles Materials Conversion 3,000 100% 100% 80% 45,000 100 Beginning inventory Transferred-in from molding during year Transferred out to packing during year Ending inventory 40,000 100 100 100 4.000 100 20 *** For Problem 49, there are 4,000 spoiled units (2,050 normal; 1,950 abnormal). In exams, you would be given these figures (i.e., you would be given the number of spoiled units including the number of normal/abnormal units). Also, for Problem 49, analyze the W-I-P account for Assembly Department using T-account approach. 6-49 Welghted-Average Method: Transferred-in Costs; Spollage (Appendix) APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the company employs a process costing system using the weighted average method. Bicycle parts are manufactured in the molding department and then are consolidated into a single bike unit in the molding department and transferred to the assembly department where they are assembled. After assembly, the bicycle is sent to the packing department. Annual cost and production figures for the assembly department are pre- sented in the schedules below. Defective bicycles are identified at the inspection point when the assembly labor process is 70% com- plete; all assembly materials have been added at this point. The normal rejection rate for defective bicy cles is 5% of the bicycles reaching the inspection point. Any defective bicycles above the 5% quota ard considered to be abnormal. All defective bikes are removed from the production process and destroyed. Required 1. Compute the number of defective, or spoiled, bikes that are considered to be a normal spoilage. b. abnormal spoilage. Compute the equivalent units of production for the year for a. bicycles transferred in from the molding department. b. bicycles produced with regard to assembly materials. c. bicycles produced with regard to assembly conversion 3. Compute the cost per equivalent unit for the fully assembled bike 4. Compute the amount of the total production cost of $1.672.020 that will be associated with the following items. a normal spoiled units. b. good units completed in the assembly department. c. abnormal spoiled units. d. ending Work-in-Process Inventory in the assembly department 5. Describe how to present the applicable dollar amounts for the following items in the financial statements a. normal spoilage units. b. abnormal spoilage units. c. completed units transferred to the packing department Assembly Department Cost Data Transferred-in from Assembly Assembly Molding Department Materials Conversion $ 82,200 $ 6,660 $ 11,930 1,237,800 96,840 236,590 $1,320,000 $103.500 $248,520 Prior period costs Current period costs Total costs Total Cost of Bike through Assembly $ 100,790 1,571,230 $1,672,020 Assembly Department Production Data Percentage Complete Transferred Assembly Assembly Bicycles Materials Conversion 3,000 100% 100% 80% 45,000 100 Beginning inventory Transferred-in from molding during year Transferred out to packing during year Ending inventory 40,000 100 100 100 4.000 100 20 *** For Problem 49, there are 4,000 spoiled units (2,050 normal; 1,950 abnormal). In exams, you would be given these figures (i.e., you would be given the number of spoiled units including the number of normal/abnormal units). Also, for Problem 49, analyze the W-I-P account for Assembly Department using T-account approach