Spaces manufactures hardware facilitating particle transmission over the internet. Direct costs are added at the beginning of the process. Conversion costs are added evenly during the process.

The following information is available for July 2019:

		Physical Units	Direct Material	Conversion Costs
Work in Progress, July 1		12,000	$22,000	$30,000
	Degree of completion: direct materials 100%, conversion costs 30%
Units started in July		48,000
Costs added during July			$60,000	$100,000
Completed and transferred out during July		50,000
Ending WIP, July 31, of 9,000 units, was 100% complete for direct materials, and 25% complete for conversion costs. Spoilage is anticipated to be 1% of completed units transferred out.

Required:

Using the weighted average method:

Using the FIFO method:

a) Calculate the cost per equivalent unit for direct materials and conversion costs.

b) Assign costs to units completed and transferred out to finished goods inventory at July 31, 2019.

c) Assign costs to abnormal spoilage for the month of July.

d) Assign costs to ending work in progress at July 31, 2019.

Required: Using standard costing:

1. Assign costs to units completed and transferred out to finished goods inventory at July 31, 2019.

2. Assign costs to abnormal spoilage for the month of July.

3. Assign costs to ending work in progress at July 31, 2019.

d) Quantify the variance and indicate if it is Favorable or Unfavorable?

The variance for direct materials is_____________.

The variance for conversion costs is____________.