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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 presented in the schedules below. Defective bicycles are identified at the inspection point when the assembly labor process is 70% complete all assembly materials have been added at this point. The normal rejection rate for defective bicycles is 5% of the bicycles reaching the inspection point Any defective bicycles above the 5% quota are considered to be abnormal. All defective bikes are removed from the production process and destroyed Assembly Department Cost Data Transferred in Total Cost of fron Molding Assembly Assembly Bike through Department Materials Conversion Assembly Prior period costs $ 101,200 $ 9,510 $ 15,160 $ 125,870 Current period costs 1,253,000 105,960 250,400 1,609,420 $1,354,200 $1,735,290 Total costs $115,470 $265, 620 Assembly Department Production Data Percentage Complete Assembly Bicycles Transferred-in Materials 3,190 1eak 100% 64,000 100 49,500 100 100 4,380 100 50 Assembly Conversion BOX Beginning inventory Transferred in from molding during year Transferred out to packing during year Ending inventory 889 100 20 Total costs $1,354,200 $115,470 $265,620 $1.295,290 Assembly Department Production Data Percentage Complete Assembly Bicycles Transferred in Materials 3,190 1eex 10 64,000 100 49,500 100 100 4,380 180 50 Assembly Conversion Beginning inventory Transferred-in from molding during year Transferred out to packing during year Ending inventory 100 20 Required: 1 Compute the number of defective, or spoiled, bikes that are considered to be a. Normal spoilage b. Abnormal spoilage. 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 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 $1735.290 that will be associated with the following items: a Normal spoiled units. 6. Good units completed in the assembly department c. Abnormal spoiled units. d. Ending Work-in-Process Inventory in the assembly department
