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Semichip is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly
Semichip is a fast-growing manufacturer of computer chips. 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. Spoiled units are disposed of at zero net disposal value. Semichip uses the weighted-average method of process costing. Summary data for September 2020 are: Requirement 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. Enter the physical units in first, then calculate the equivalent units. Flow of Production Work in process beginning Started during current period To account for Completed and transferred out during current period Normal spoilage Abnormal spoilage Work in process, ending Physical Units A 1 2 Work in process, beginning inventory (September 1) 3 Degree of completion of beginning work in process 4 Started during September 5 Good units completed and transferred out during September 6 Work in process, ending inventory (September 30) 7 Degree of completion of ending work in process 8 Total costs added during September 9 Normal spoilage as a percentage of good units 10 Degree of completion of normal spoilage 11 Degree of completion of abnormal spoilage B Physical Units (Computer Chips) 1,400 $ 1,964 2,200 C D Direct Materials Conversion Costs 117,532 $ 17,087 100% 30% 540 100% 25% $ 575,452 $ 228,510 15% 100% 100% 100% 100% Requirements 1. For each cost category, compute equivalent units. Show physical units in the first column. 2. Summarize total costs to account for; calculate cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
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