Question
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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