HOMEWORK 2 (PROCESS COSTING & SPOIL AGE) Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process. The normal spoilage rate is calculated as 10% of good units completed. The cost of the beginning work-in-process in the month of May is $3,000,000, including $1,600,000 of input of materials, 100,000 units, and $1,400,000 for conversion costs. The beginning work-in-process is 70% complete. During May, the input includes $7,400,000 for materials, 800,000 units started and $4,190,000 for conversion costs. There were 700,000 good units finished. In addition, the ending work- in-process in May is 100,000 units with 60% complete. All spoilage occurred when all processing was complete, at the final inspection Required: 1. Using each of the weighted average and FIFO methods, calculate (for May): (a) The dollar value of abnormal spoilage. (b) The cost of the good units finished. (c) The cost of ending work-in-process inventory 2. Using only the FIFO numbers from 1. above, prepare the journal entries to record the cost of materials, conversion costs, good units transferred out of the process and abnormal spoilage for the month of May