Question
Vista manufactures tables at its factory plant in Milano. Direct materials are added at the beginning of the production cycle. Conversion costs are incurred evenly
Vista manufactures tables at its factory plant in Milano. Direct materials are added at the beginning of the production cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to undetectable materials defects. Spoiled units generally constitute 3% of the good units. Data for December 2018 are as follows:
WIP, beginning inventory 22,700 units
Direct materials (100% complete)
Conversion costs (80% complete)
Started during December 76,300 units
Completed and transferred out 72,100 units
WIP, ending inventory 18,100 units
Direct materials (100% complete)
Conversion costs (60% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $151,000
Conversion costs $76,900
Direct materials added $231,400 Conversion costs added $294,000
- Compute the normal and abnormal spoilage in units.
- Compute equivalent units for direct materials and conversion costs.
- Calculate the cost per equivalent unit for direct materials and conversion costs. (Round the cost per unit calculation to the nearest cent; two decimals)
- Assign costs to units completed and transferred out; to abnormal spoilage, and to units in ending work-in-process inventory.
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