New Image Sports uses a process costing system. Direct materials are placed into production at the beginning of the process. Conversion costs are added evenly during the process. All spoilage is normal and is detected at the end of the process. For March the company had the following activities:

Beginning work in process inventory 6,000 units, one third complete (conversion)

Units placed in production (new) 24,000

units Good units completed (start to finish) 12,000 units

Ending work in process inventory 10,000 units, one half complete (conversion) Normal spoilage 5% of units placed into production

Abnormal spoilage ?

Cost of beginning work in process $5,000

Direct material costs, current $18,000

Conversion costs, current $13,800

REQUIRED:

a) Calculate the cost per equivalent unit for direct materials and conversion costs using the FIFO method. (4 Marks)

b) Summarize total costs to account for, and assign these costs to units completed and transferred out, normal spoilage and to units in ending work-in-process. (6 Marks