APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the company employs a process cost system using the weighted-average method to determine unit costs. 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 partially assembled. After assembly, the bicycle is sent to the packing department.

Cost per unit data for the 20-inch dirt bike have been completed through the molding department. Annual cost and production figures for the assembly department are presented in the schedules that follow.

Assembly Department Cost Data

Transferred in

Assembly

Total Cost of

From Molding

Assembly

Conversion

Dirt Bike through

Department

Materials

Cost

Assembly

Prior period costs

$68,680

$6,058

$9,389

$84,127

Current period costs

$1,064,490

$90,993

$192,429

$1,347,912

Total costs

$1,133,170

$97,051

$201,818

$1,432,039

Assembly Department Production Data

Percentage Complete

Assembly

Bicycles

Transferred-in

Materials

Conversion

Beginning inventory

2,400

100%

100%

67%

Transferred in from molding during year

36,500

100%

Transferred out to packing during year

30,000

100%

100%

100%

Ending inventory

3,700

100%

42%

64%

Defective bicycles are identified at the inspection point when the assembly labor process is 75 percent complete; all assembly materials have been added at this point. The normal rejection for defective bicycles is 4 percent of the bicycles reaching the inspection point. Any defective bicycles above the 4 percent quota are 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

b. Abnormal

2. 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 material.

c. Bicycles produced, with regard to assembly conversion.

3. Compute the cost per equivalent unit for the fully assembled dirt bike.

4. Compute the amount of the total production cost of $1,432,039 that will be associated with the following items:
a. Normal spoiled units.
b. Abnormal spoiled units.
c. Good units completed in the assembly department.
d. Ending WIP inventory in the assembly department.