Cuero Company produces leather strips for western belts using three processes: cutting, design and coloring, and punching. The weighted average method is used for all three departments. The following information pertains to the Design and Coloring Department for the month of June:

There was no beginning work in process.

There were $560,000$ units transferred in from the Cutting Department.

Ending work in process, June $30$: $70,000$ strips, $80$ percent complete with respect to conversion costs.

Units completed and transferred out: $462,000$ strips. The following costs were added during the month:

Transferred in $$2,800,000$

Direct materials $840,000$

Conversion costs $1,092,000$

Direct materials are added at the beginning of the process.

Inspection takes place at the end of the process. All spoilage is considered normal.

Required:

Question Content Area

$1.$ Calculate equivalent units of production for transferred$-$in materials, direct materials added, and conversion costs.

Equivalent Units

Transferred In fill in the blank $72$a$3$e$00$eafa$1$f$91\_1$

Direct Materials fill in the blank $72$a$3$e$00$eafa$1$f$91\_2$

Conversion Costs fill in the blank $72$a$3$e$00$eafa$1$f$91\_3$

$2.$ Calculate unit costs for the three categories of Requirement $1.$ Round your answers to the nearest cent.

Unit Cost

Transferred In $fill in the blank $72$a$3$e$00$eafa$1$f$91\_4$

Direct Materials $fill in the blank $72$a$3$e$00$eafa$1$f$91\_5$

Conversion Costs $fill in the blank $72$a$3$e$00$eafa$1$f$91\_6$

Total unit cost $fill in the blank $72$a$3$e$00$eafa$1$f$91\_7$

$3.$ What is the total cost of units transferred out?

$fill in the blank $72$a$3$e$00$eafa$1$f$91\_8$

What is the cost of ending work$-$in$-$process inventory?

$fill in the blank $72$a$3$e$00$eafa$1$f$91\_9$

Question Content Area

$4.$ Assume that all spoilage is considered abnormal. How should abnormal spoilage be treated? Give the journal entry to account for the cost of the spoiled units.

blank

Question Content Area

Some companies view all spoilage as abnormal. Explain why.

The abnormal spoilage, the cost of $23,380$ units would be assigned to the

$,$ and the cost of the other $4,620$ units would be assigned to the

$.$

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$5.$ For Requirement $4,$ provide an example of each data analytic type $($descriptive$,$ diagnostic, predictive, and prescriptive$)$ with a brief justification $($see Exhibits $2\mathrm{.}5$ and $2\mathrm{.}6,$ pp$.37,40,$ for a review of data analytic types$).$

The journal entry for abnormal spoilage describes what the loss is

$.$

Explaining why companies view all spoilage as abnormal is

$.$

Using the $1$ percent rule allows the firm to predict normal spoilage is

$.$

Total quality management would say that all spoilage should be treated as abnormal and assigned to a loss account.