Exercise Three (10 Points): Silver Spoon Incorporated is a manufacturer of kitchen utensils. It produces all of its products in one department. Direct materials are added at the beginning of the process. The information for the current month is as follows; The company uses the weighted average method of process costing. Physical Units |Direct Materials Conversion Costs 37.500 $ 387 5001 $ 587.500 Work in process, beginning 1009% 2OPE yo completion of WIP 55.000 Started during the month Good units completed & transferred out 72.000 Work-in-process, ending inventory 15.000 30% yo completion of ending WIP 100%% $1,000.000 $ 1,500,000 Total costs added during August Normal spoilage as %% of good units 100% 1009% yo completion of normal spoilage To completion of abnormal spoilage 100% 1009% Required: 1. For each cost category, calculate equivalent units Flow of Production Pinisical Units |Direct Materials |Conversion Costs Work in process, beginning 37.500 Started during current period 55,000 To account for 92.500 Completed and transferred out Normal spoilage Abnormal spoilage Work in process, ending Accounted for Work done to date 2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. Cost per equivalent mor Work in process, beginning Direct Materials |Conversion Cost| |Total Costs $ 387,500 Costs added in current period .3.387,500 $ 975.000 Total costs to account for 1,000,000 1.500.000 2.500.000 Equivalent units of work 1,387,5001 2,087,500 3.475.000 Cost per equivalent unit assign total costs : Good units completed & transferred out Direct Materials | Comein Conversion Cost Total Cost Cost before adding normal spoilage Normal spoilage Total cost of good units completed & transferred out Abnormal spoilage Work in process, ending Total costs accounted for