Question 9:

a) You are provided with the following information about the process costs for Paulas Machines Ltd for December. Material is added at the start of the process and conversion costs are incurred evenly throughout the process.

Work in process (units) - 1 December	250,000
Units started in December	1,250,000
Units completed and transferred out	1,200,000
Normal spoilage units during manufacturing	29,520
Work in process (units) - 31 December	60% complete with respect to conversion.

Spoilage is normally detected 25% of the way through the manufacturing process.

Tasks

1. Prepare a schedule of equivalent units.

2. Assume that the direct material cost per equivalent unit is $1.50 and the conversion cost per equivalent unit is $3.00. Calculate the total cost of finished goods for the month of November.