Yeager Ltd is a manufacturer of ODM gear and uses the FIFO method of process costing. 160,000 units were started in this month. In the initial production department, conversion occurs uniformly and 100% of direct material is added at the start of the process.

There were 20,000 physical units with conversion at 30% completion in the opening inventory for this month. There were 30,000 physical units with conversion at 25% completion in the closing inventory. The following table shows the opening inventory costs and cost incurred during the month:

	Conversion	Direct Material
Cost incurred in the month	$3,020,000	$6,320,000
Opening inventory	$120,000	$750,000

A)Prepare the production report of Yeager Ltd for the month (outlining the physical flow of units and equivalent units) and calculate the Cost per Equivalent Unit for DM and the Cost per Equivalent Unit for Conversion. calculate to 2 decimal places.

b) Explain what is meant by normal spoilage and abnormal spoilage. Explain how both spoilages are accounted for.

Opening Units Units Started Units Finished Ending Units