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Problem 18-36 (similar to) Question Help Fabchip specializes in the manufacture of ball bearings for aircraft. Direct materials are added at the start of the

Problem 18-36 (similar to)

Question Help

Fabchip

specializes in the manufacture of ball bearings for aircraft. 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. Normally, the spoiled units are 15% of the good units transferred out. Spoiled units are disposed of at zero net disposal price.

Fabchip

uses the FIFO method of process costing. Summary data for September

2018

are:

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Required

1.

For each cost element, compute the equivalent units. Show physical units in the first column.

2.

For each cost element, calculate the cost per equivalent unit.

3.

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

Requirement

1.

For each cost element, compute the equivalent units. Show physical units in the first column.

Enter the physical units in first, and then calculate the equivalent units. (Round your answers to the nearest whole unit.)

Physical

Flow of Production

Units

Work in process, beginning

Started during current period

To account for

Completed and transferred out during current period:

From beginning work in process

Started and completed

Normal spoilage

Abnormal spoilage

Work in process, ending

Accounted for

Work done in current period only

Physical Units

Direct

Conversion

(ball bearings)

Materials

Costs

Work-in-process, September 1a

1,250

$96,840

$18,900

Started during September 2018

3,000

Good units completed and transferred out during September 2018

2,400

Work-in-process, September 30b

300

Costs added during September 2018

$582,500

$290,250

aDegree

of completion: direct materials, 100%; conversion costs, 30%.

bDegree

of completion: direct materials,

100%;

conversion costs,

45%.

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