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based in Alberta. It operates under the weighted average method of process costing and has two depart- FIFO l-average method, spoilage. The Red Deer Company
based in Alberta. It operates under the weighted average method of process costing and has two depart- FIFO l-average method, spoilage. The Red Deer Company is a food-processing company ments: cleaning and packaging. For the cleaning department, conversion costs are added evenly during the Problems ut D Conversion Costs $ 2,000 80% 1 3 4 8 process, and direct materials are added at the beginning of the process. Spoiled units are detected upon inspection at the end of the process and are disposed of at zero net disposal value. All completed work is transferred to the packaging department. Summary data for May follow: B Physical Direct Units Materials The Red Deer Company: Cleaning Department 2,500 $ 2,500 2 Work-in-process, beginning inventory (May 1) Degree of completion of beginning work-in-process 100% Started during May 22,500 5 Good units completed and transferred out during May 18,500 6 Work-in-process, ending inventory (May 31) 4,000 7 Degree of completion of ending work-in-process 100% 25% Total costs added during May $22,500 $20,000 9 Normal spoilage as a percentage of good units 10% 130 10 Degree of completion of normal spoilage on 100% 100% 11 Degree of completion of abnormal spoilage 100% 100% 1313 1803 31 Required For the cleaning department, summarize total costs to account for, and assign total costs to units com- pleted and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work-in-process. Carry unit-cost calculations to four decimal places when necessary. Calculate final totals to the nearest dollar. (Problem 32 explores additional facets of this problem.) 31 FIFO method, spoilage. Refer to the information in Problem 30. Required Do Problem 30 using the FIFO method of process costing. (Problem 33 explores additional facets of this problem.)
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