18-24 and 18-25 L02 18-24 Weighted-average method, spoilage. Chipcity Inc. is a

Question

18-24 and 18-25 L02 18-24 Weighted-average method, spoilage. Chipcity Inc. is a fast-growing manufacturer of computer equhalent units for chis. Direct materials are added at the start of the production process. Conversion costs are added evenly costs, 2,880 units during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chipcity uses the weighted-average method of process costing. Summary data for September 2015 are: Physical Units (computer chips) 600 Direct Materials S 96,000 100% Conversion Costs $ 15,300 Work-in-process, beginning inventory (Sept. 1) Degree of completion of beginning WIP 30%

Explanation / Answer

18-24)

Production report under Weighted average method: Phy units D Mat Conv costs Total B WIP 600 600 600 started and completed 1500 1500 1500 Tranf out 2100 Normal spoilage 315 0 0 Abnormal spilage 285 285 285 E WIP 450 450 180 Eq Units 2835 2565 REQ 1 Total costs: B WIP 96000 15300 Incurred during Sept 567000 230400 Total costs 663000 245700 Cost per Eq unit 233.86 95.79 REQ 2 Cost of Trasferred out 2100*233.86 = 491106 2100*95.79=201159 692265 REQ 2 Cost of E WIP 105237 17242 122479 REQ 2 Cost of Abnormal Spoilage 66650 27300 93950 REQ2

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