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Chipcity is a fast growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly 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 .
1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule.
2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage , and to units in ending work in process
Financial Statement Analysis and Preparation
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T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
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