I am doing number 26.
19-25. WEIGHTED-AVERAGE METHOD, SPOILAGE. LaCroix Company produces handbags from leather of moderate quality. It distributes the product through outlet stores and department store chains. At LaCroix's facility in northeast Ohio, direct materials (primarily leather hides) are added at the beginning of the process, while conversion costs are added evenly during the process. Spoiled units are detected upon inspection at the end of the process and are discarded at a net disposal value of zero. LaCroix uses the weighted average method of process costing. Summary data for April 2020 are shown below: Home Insert Formulas Data Review Page Layout B Physical Units 2,400 View Direct Materials $21,240 100% 1 D Conversion Costs $ 13,332 50% 12,000 10,800 2,160 2 Work in process, beginning inventory (April 1) 3 Degree of completion of beginning work in process 4 Started during April 5 Good units completed and transferred out during April 6 Work in process, ending inventory (April 30) 7 Degree of completion of ending work in process 8 Total costs added during April 9 Normal spoilage as a percentage of good units 10 Degree of completion of normal spoilage 11 Degree of completion of abnormal spoilage 100% $97,560 75% $111,408 10% 100% 100% 100% 100% Required 1. For each cost category, calculate equivalent units. Show physical units in the first column. 2. Summarize total costs to account for; calculate cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process inventory. 19-26. FIFO METHOD, SPOILAGE (CONTINUATION OF 19-25). Required 1. Do Exercise 19-25 using the FIFO method. 2. What are the managerial issues involved in selecting or reviewing the percentage of spoilage considered normal? How would your answer to requirement 1 differ if all spoilage were viewed as normal? 19-25. WEIGHTED-AVERAGE METHOD, SPOILAGE. LaCroix Company produces handbags from leather of moderate quality. It distributes the product through outlet stores and department store chains. At LaCroix's facility in northeast Ohio, direct materials (primarily leather hides) are added at the beginning of the process, while conversion costs are added evenly during the process. Spoiled units are detected upon inspection at the end of the process and are discarded at a net disposal value of zero. LaCroix uses the weighted average method of process costing. Summary data for April 2020 are shown below: Home Insert Formulas Data Review Page Layout B Physical Units 2,400 View Direct Materials $21,240 100% 1 D Conversion Costs $ 13,332 50% 12,000 10,800 2,160 2 Work in process, beginning inventory (April 1) 3 Degree of completion of beginning work in process 4 Started during April 5 Good units completed and transferred out during April 6 Work in process, ending inventory (April 30) 7 Degree of completion of ending work in process 8 Total costs added during April 9 Normal spoilage as a percentage of good units 10 Degree of completion of normal spoilage 11 Degree of completion of abnormal spoilage 100% $97,560 75% $111,408 10% 100% 100% 100% 100% Required 1. For each cost category, calculate equivalent units. Show physical units in the first column. 2. Summarize total costs to account for; calculate cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process inventory. 19-26. FIFO METHOD, SPOILAGE (CONTINUATION OF 19-25). Required 1. Do Exercise 19-25 using the FIFO method. 2. What are the managerial issues involved in selecting or reviewing the percentage of spoilage considered normal? How would your answer to requirement 1 differ if all spoilage were viewed as normal
