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Category > Accounting Posted 23 Jul 2017 My Price 9.00

LaToya Company

(WA; normal and abnormal discrete spoilage) LaToya Company produces door pulls, which are inspected at the end of production. Spoilage may occur because the door pull is improperly stamped or molded. Any spoilage in excess of 3 percent of the completed good units is considered abnormal. Direct material is added at the start of production. Labor and overhead are incurred evenly throughout production.

The company’s May 2010 production and cost data follow:

Beginning WIP Inventory (50% complete)

5,600

Units started

74,400

Good units completed

70,000

Ending WIP Inventory (1/3 complete)

7,500

 

DM

Conversion

Total

Beginning inventory

$ 6,400

$ 1,232

$ 7,632

Current period

74,400

31,768

106,168

Total

$80,800

$33,000

$113,800

Calculate the equivalent units schedule, prepare a weighted average cost of production report, and assign all costs. LaToya extends both the normal and abnormal spoilage units in the EUP schedule to all cost components that have been incurred to the point of detection (100 percent completion). The cost of normal spoilage is attached to the units transferred to Finished Goods Inventory; the cost of abnormal spoilage is considered a period loss.

Answers

(5)
Status NEW Posted 23 Jul 2017 11:07 PM My Price 9.00

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