QUESTIONS:

1.What would be considered normal spoilage (in units)?

2.What's the equivalent units of production (materials) ?

3.What's the equivalent units of production (conversion)?

4.What is the Materials cost per unit for February production?

5.What is the Conversion cost per unit for February production?

6.How much should be charged to Loss from Abnormal Spoilage in February?

7.What is the total cost of the units transferred out?

8.What is the total cost of ending inventory?

9.What is the cost per unit of the goods transferred out in February?

Ramsha Industries makes rocking chairs. The chairs are assembled in the Assembly Department and stained and sealed in the Finishing Department. Chairs are tested for quality in the Assembly Department before being transferred to Finishing. Normal spoilage (defective chairs averages 1% of good units in the Assembly Department Ramsha uses the FIFO cost method of process costing Activity during February in the Assembly Department Stage of completion Production activity: Work in Started in February Good units transferred out Work in process, ending inventory Material Conversion 1,000 6,000 6,000 900 process, beginning inventory 90% 50% 95% 75% How many units, if any, were rejected? What would be considered normal spoilage (in units)? Cost activity: Total Conversion $ 83,830 65,080 $ 18,750 138,050 Material Costs in beginning WIP February costs 525,570 387,520