Verer Custom Carpentry manufactures chairs in its Processing Department.Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit.Conversion costs are incurred evenly throughout the production cycle.Inspection takes place as units are placed into production.After inspection,some units are spoiled due to undetectable material defects.Spoiled units generally constitute 5% of the good units.Data provided for March 2017 are as follows:

Costs:

What costs are allocated to the ending work-in-process inventory for direct materials and conversion costs,respectively,using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent. )

Question

Verer Custom Carpentry manufactures chairs in its Processing Department.Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit.Conversion costs are incurred evenly throughout the production cycle.Inspection takes place as units are placed into production.After inspection,some units are spoiled due to undetectable material defects.Spoiled units generally constitute 5% of the good units.Data provided for March 2017 are as follows:

Costs:

What costs are allocated to the ending work-in-process inventory for direct materials and conversion costs,respectively,using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent. )

Costs:

What costs are allocated to the ending work-in-process inventory for direct materials and conversion costs,respectively,using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent. )

Quizplus · Accepted Answer

11ea8a5a_a069_8174_a19c_756e65d2c322_TB5540_00_TB5540_00_TB5540_00 WIP,beginning inventory
 11ea8a5a_a069_a885_a19c_5de5aeff6d10_TB5540_00_TB5540_00_TB5540_00 11ea8a5a_a069_a886_a19c_77ce2368f474_TB5540_00_TB5540_00_TB5540_00 11ea8a5a_a069_a887_a19c_db73a08ced04_TB5540_00_TB5540_00_TB5540_00 Total cost per equivalent unit: $1.51 + $1.89 = $3.40 per unit
Normal spoilage (units): 5% x 80,000 = 4000 spoiled units
Abnormal spoilage (units): (32,500 + 70,300)- 80,000 + 18,700)- 4000 = 100 spoiled units
* Equivalent units,Direct Materials: (80,000 - 32,500)+ 4000 + 100 + 18,700 =70,300 units
** Equivalent units,Conversion Costs: (32,500x (100% - 90%))+ (80,000 - 32,500)+ 4000 + 100 + (18,700 x 70%)= 67,940 units
Direct materials: 18,700 units x $1.51 = $28,237
Conversion costs: (18,700 x 70%)units x $1.89 = $24,740

Verer Custom Carpentry Manufactures Chairs in Its Processing Department