Answer the following questions using the information below:
Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to nondetectible defects. Inspection occurs when units are 50% converted. Spoiled fillets generally constitute 3.5% of the good fillets. Data for April 2012 are as follows:
Costs for April:

-What cost is allocated to abnormal spoilage using the weighted-average process-costing method?

Question

Answer the following questions using the information below:
Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to nondetectible defects. Inspection occurs when units are 50% converted. Spoiled fillets generally constitute 3.5% of the good fillets. Data for April 2012 are as follows:
  Costs for April:
 
-What cost is allocated to abnormal spoilage using the weighted-average process-costing method?

Quizplus · Accepted Answer

Allocating costs using the weighted-average method involves combining the costs from the current period with the costs from the previous period and dividing by the equivalent units of production for the current period. Therefore, any costs associated with abnormal spoilage in the current period will be included in the total cost and allocated to all units produced, including the spoiled units. The total cost for April is given as $56,880. Since spoiled fillets constitute 3.5% of the good fillets, the cost of spoiled fillets will be 3.5% of the total cost, which is $1,988. Subtracting this from the total cost gives $54,892, which is the cost allocated to good units. The cost allocated to abnormal spoilage is therefore $1,988, which is option B.

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