Essay
Consider the following data for a cooking department for the month of February:
| Physical Units | ||
| Work in process, beginning inventory* | 11,000 | |
| Started during current period | 74,000 | |
| To account for | 85,000 | |
| Good units completed and transferred out during current period: | ||
| From beginning work in process | 11,000 | |
| Started and completed | 50,000 | |
| Good units completed | 61,000 | |
| Spoiled units | 8,000 | |
| Work in process, ending inventory~ | 16,000 | |
| Accounted for | 85,000 |
~Direct material,100% complete;conversion costs,75% complete
Inspection occurs when production is 100 percent completed.Normal spoilage is 11 percent of good units completed and transferred out during the current period.
The following cost data are available:
| Work in process, beginning inventory: | |||
| Direct material | $220,000 | ||
| Conversion costs | 30,000 | $ 250,000 | |
| Costs added during current period: | |||
| Direct material | 1,480,000 | ||
| Conversion costs | 942,000 | ||
| Costs to account for | $2,672,000 |
Required:Prepare a detailed cost of production report.Use the FIFO method.Distinguish between normal and abnormal spoilage.
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