Inter Manufacturing Company manufactures expensive chairs. The following data re
ID: 2523383 • Letter: I
Question
Inter Manufacturing Company manufactures expensive chairs. The following data relates to the month of January 20x1.
Normal spoilage in units =
The maximum units allowed for normal spoilage
Total costs charger to finished goods
The cost of normal spoilage =
Total abnormal spoilage costs =
A. 400 B. $220,300 C. 500 D. 520 E. $194,133.05 F. $7465.89 G. $8565.89 H. - 110 I. $201,578.94 J. $20,000 K. 490 L. nothing
Inter Manufacturing Company manufactures expensive chairs. The following data relates to the month of January 20x1.
Units Beginning Work in Process (1-1-x1) 3,000 Added during the month 12,000 Completed and transferred out (CTO) 13,000 Ending Work in Process (31-1-x1) 1,500 Percentage of Completion Beginning Work in Process (1-1-x1) 60% Ending Work in Process (31-1-x1) 40% Costs added during January Total costs Beginning Work in Process (1-1-x1) $60,300 Costs added during January $160,000 Conversion costs Beginning Work in Process (1-1-x1) $5,200 Costs added during January $52,400 The company uses Weighted Average Process Costing Method and materials are added at the beginning of process. The inspection point for spoilage units occurs at the end of production process Spoilage is considered abnormal if it is greater than 4% of CTOExplanation / Answer
1) Normal spoilage in units = TOTAL INPUT - OUTPUT-C WIP=3000+12000-13000-1500=500 UNITS 2) Maximum normal spilage = CTO * % of normal spoilage= 13000*4% = 520 units Phy unit mate conve total o wip 3000 3000 3000 started and completed 10000 10000 10000 Trasfr out 13000 normal spoilage 500 c wip 1500 1500 600 Eq units 14500 13600 Total costs: o wip 55100 5200 added during Jan 107600 52400 Total costs: 162700 57600 cost per Eq unit 11.22 4.24 3)cost of finished goods =13000*(11.22+4.24) =$200980 4)cost of normal spoilage= 500*(11.22+4.24) =$7730 5) Total cost of abnormal spoilage = nil (nothing) (no abnormal spoilage)
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