Present computations, journal entries and schedules in an Excel file.

46. LO.3 & LO.8 (Appendix 3; FIFO; normal and abnormal loss) Omaha Foods manufactures corn meal in a continuous, mass production process. Corn is added at the beginning of the process. Normal losses are minimal and abnormal losses infrequently occur when foreign materials are found in the corn meal. Routine inspection occurs at the 95 percent completion point as to conversion. During May, a machine malfunctioned and dumped salt into 8,000 pounds of corn meal. This abnormal loss occurred when conversion was 70 percent complete on those pounds of product. The error was immediately noticed, and those pounds of corn meal were pulled from the production process. Two thousand additional pounds of meal were detected as unsuitable at the routine inspection point; this amount was considered within normal limits. Production data for the month follow.

Beginning WIP Inventory (85% complete)

Started during the month Ending

WIP Inventory (25% complete) 40,000 pounds 425,000 pounds 10,000 pounds

a. Determine the number of EUP for direct material and for conversion, assuming a FIFO cost flow.

b. If the costs per EUP are $0.08 and $0.15 for direct material and conversion, respectively, what is the cost of the ending WIP Inventory?

c. What is the cost of abnormal loss? How is this cost treated in May?

Exercise 6-46 Name: Insert your answers in the gray-shaded cells of columns E, G and I. If an answer is incorrect, an asterisk will appear. a. Units Beginning inventory Pounds started Material - Pounds to account for Beginning inventory completed Started & completed Ending inventory Normal spoilage Abnormal spoilage - EUP (FIFO) b. Ending inventory: Material Conversion Total cost c. Ending inventory: Material Conversion Total cost - Conversion