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MicroMem is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during

MicroMem is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. MicroMem uses the FIFO method of process costing. Summary data and weighted-average data for September 2017 are as follows:

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A D B Physical Units (Computer Chips) Direct Materials Conversion Costs 1 1,100 $ 216,588 $ 14,844 3 100% 30% 2,806 2,700 510 2 Work in process, beginning inventory (September 1) Degree of completion of beginning work in process 4 Started during September 5 Good units completed and transferred out during September 6 Work in process, ending inventory (September 30) Degree of completion of ending work in process 8 Total costs added during September 9 Normal spoilage as a percentage of good units 10 Degree of completion of normal spoilage 11 Degree of completion of abnormal spoilage 7 100% 30% 572,424 $ 283,272 15% 100% 100% 100% 100% Total Production Direct Conversion Costs Materials Costs $ 202.00 $ 84.00 Cost per equivalent unit for work done to date 888,030 $ 627,210 $ 260,820 Cost of units completed and transferred out Abnormal spoilage 83,226 58,782 24,444 Work in process, ending 115,872 103,020 12,852 Total costs accounted for $ 1,087,128 $ 789,012 $ 298,116 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. 2. Summarize the total costs to account for; calculate the 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. 3. Should MicroMem's managers choose the weighted-average method or the FIFO method? Explain briefly

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