Question
Spoil company uses the weighted-average process costing method. The company began April with a WIP inventory of 3,750 units (10% complete) and 82,000 units were
Spoil company uses the weighted-average process costing method. The company began April with a WIP inventory of 3,750 units (10% complete) and 82,000 units were entered into production during the month. Conversion costs are incurred uniformly over the production process. Bhavani determines that the 4,750 units in its ending WIP are 90% complete with respect to conversion, and values this inventory (before any adjustments for spoilage) at $30 per unit. The company also determines that the cost of the completed units is $1,594,725 (before any adjustments for spoilage). Based on inspection (at the 100% point), Bhavani determines that 255 units are normally spoiled, with a cost of $4,750. -130 units are abnormally spoiled, with a cost of -$2,500 (that is, there is again from abnormal spoilage). What is the total cost of the ending WIP, after adjusting for spoilage?
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