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The following data, in physical units, describe a grinding process for January: Inspection occurs at the 100% completion stage. Normal spoilage is 5% of the
The following data, in physical units, describe a grinding process for January: Inspection occurs at the 100% completion stage. Normal spoilage is 5% of the good units passing inspection. Requirement 1. Compute the normal and abnormal spoilage in units. Normal spoilage (in units) Abnormal spoilage (in units) Requirement 2. Assume that the equivalent-unit cost of a spoiled unit is $10. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer. Regardless of the targeted normal spoilage, abnormal spoilage is The targeted normal spoilage rate subject to change. Many companies have reduced their spoilage to almost zero, which would jotential savings. Data table Requirements 1. Compute the normal and abnormal spoilage in units. 2. Assume that the equivalent-unit cost of a spoiled unit is $10. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your
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