Asia Limited has recently started ice-cream manufacturing and uses the weighted-average method in its process costing system. The following data concern the operations of the companys first processing department for a recent month:

Work in process, beginning: Units in process300 Percent complete with respect to materials60% Percent complete with respect to conversion30%

Costs in the beginning WIP inventory:

Materials cost$342 Conversion cost$2,394 Units started into production during the month21,000Units completed and transferred out20,700 Costs added to production during the month: Materials cost$44,136 Conversion cost$546,750 Work in process, ending: Units in process600 Percent complete with respect to materials80% Percent complete with respect to conversion30%

However, the company does not have much prior experience in a process-costing environment. They have heard about the concept of equivalent units but are not sure how to calculate the cost per equivalent unit. They are thinking of appointing an external consultant to address this issue.

Also, while performing a recent quality check, the companys production department found that one batch of ice cream (amounting to $14,500) did not meet the quality standard. As a result, the whole batch of ice cream was discarded. Further investigation revealed that some newly joined workers were mainly responsible for the above quality problem. The company is in dilemma whether they should treat $14,500 as normal or abnormal spoilage, and most importantly, how they should record it in the companys account. The company is also intending to take help from an external consultant in this regard.