XYZ Inc. 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 undetectable defects. Inspection occurs when units are completed. Spoiled fillets generally constitute 3% of the good fillets. Data for April 2017 are as follows: WIP, beginning inventory 4/1/2017 17,600 fillets
Direct materials (100% complete)
Conversion costs (20% complete)
Started during April 60,900 fillets
Completed and transferred out 4/30/2017 58,200 fillets
WIP, ending inventory 4/30/2017 18,000 fillets
Direct materials (100% complete)
Conversion costs (80% complete)
Costs for April:
WIP, beginning Inventory:
Direct materials $183,600
Conversion costs 92,500
Direct materials added 267,775
Conversion costs added 353,155
Required:
a) What is the number of total spoiled units? Normal spoilage totals? Abnormal spoilage totals?
b) Compute the equivalent units for both direct materials and conversion costs using the weigh average method of process costing? What is the total cost per equivalent unit? Show computation
c) How much costs are assigned to cost of goods manufactured and cost of ending inventory of work in process? Show computations