Question
The Grant Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of process costing. Now we focus
The Grant Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of process costing. Now we focus on the Finishing Department.
Conversion costs are added evenly during the process. Direct material costs are added when production is 90% complete. The inspection point is at 80% stage of production. Normal spoilage is 10% of all good units that pass inspection. Spoiled units are disposed of at zero net disposal value.
In September, the following are recorded:
| Physical Units | Transferred-in Costs | Direct Materials | Conversion Costs |
Beginning WIP | 12,000 |
|
|
|
Percentage of completion |
| 100% | 0% | 25% |
Costs included in beginning WIP |
| $86,400 | $0 | $57,200 |
Units started | 78,000 |
|
|
|
Units completed | 58,000 |
|
|
|
Units in ending WIP | 20,000 |
|
|
|
Percentage of completion |
| 100% | 100% | 95% |
Spoiled units | 12,000 |
|
|
|
Total costs added during current period |
|
|
|
|
Transferred-in costs |
| $737,100 |
|
|
Direct materials |
|
| $731,640 |
|
Conversion costs |
|
|
| $1,402,010 |
Requirement: For September, Summarize total costs to account for and assign these costs to units completed and transferred out, to abnormal spoilage, and to units in ending work in process ( IN FIFO Method) | ||||
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