fue fu Tim Bernal Environnict competitive eruitment and Evaluation ich capell Question 5 (20 marks) Wing Wah Chemical Command Wine Wahl manufactures a high-quality paint product. Each product will se e the colour-mixing process. In the process, all direct materials are added the beginning of the process and conversion costs are added evenly during the evenly during the process. Inspection occurs at the 90% stage of production. Normal spoilage is 10% of all t its that pass inspection. Spoilage units are disposed of at ZTE net dissal value The company operates under the weighted average method of process costing. The following is the data for April 2019, Physical units 70,000 430,000 Direct materials $140,000 Conversion costs $306,800 Heway to Work in process, beginning 1 April Started during April Good units completed and transferred out during April Work in process, ending 30 April Total costs added during April 390,000 56,000 $1,860,000 $660,000 Degree of completion of beginning work in process is ou Degree of completion of ending work in process is 80% Required: (6 marks) (a) For April 2019, show the physical units and compute the equivalent units for each of the cost category. (8 marks) (b) Also for April 2019, summarize total costs to account for and assign these costs to: (1) units completed and transferred out (including normal spoilage); (ii) abnormal spoilage; (iii) units in ending work in process. (4 marks) (c) If you are the plant controller of Wing Wah, what managerial issues should you focus on when reviewing the percentage of spoilage considered normal? (2 marks) (d) If Wing Wah seeks to have a more consistent cost per equivalent unit, is the current weighted average costing method the right choice? Explain briefly. Page 8 of 9 ACT B313F (1900) fue fu Tim Bernal Environnict competitive eruitment and Evaluation ich capell Question 5 (20 marks) Wing Wah Chemical Command Wine Wahl manufactures a high-quality paint product. Each product will se e the colour-mixing process. In the process, all direct materials are added the beginning of the process and conversion costs are added evenly during the evenly during the process. Inspection occurs at the 90% stage of production. Normal spoilage is 10% of all t its that pass inspection. Spoilage units are disposed of at ZTE net dissal value The company operates under the weighted average method of process costing. The following is the data for April 2019, Physical units 70,000 430,000 Direct materials $140,000 Conversion costs $306,800 Heway to Work in process, beginning 1 April Started during April Good units completed and transferred out during April Work in process, ending 30 April Total costs added during April 390,000 56,000 $1,860,000 $660,000 Degree of completion of beginning work in process is ou Degree of completion of ending work in process is 80% Required: (6 marks) (a) For April 2019, show the physical units and compute the equivalent units for each of the cost category. (8 marks) (b) Also for April 2019, summarize total costs to account for and assign these costs to: (1) units completed and transferred out (including normal spoilage); (ii) abnormal spoilage; (iii) units in ending work in process. (4 marks) (c) If you are the plant controller of Wing Wah, what managerial issues should you focus on when reviewing the percentage of spoilage considered normal? (2 marks) (d) If Wing Wah seeks to have a more consistent cost per equivalent unit, is the current weighted average costing method the right choice? Explain briefly. Page 8 of 9 ACT B313F (1900)
