Calculate cost per equivalent unit for each cost category

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Reference no: EM13492220

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 .

 

              Physical Units - Computer Chips Direct Materials Conversion     Costs 
Work in process, beginning inventory (September 1)   
600 $96,000 $15,300
Degree of completion of beginning work in process 

100% 30%
Started during September

 
2550

Good units completed and transferred out during September
2100

Work in process, ending inventory(September 30)  
450

Degree of completion of ending work in process  

100% 40%
Total costs added during September
 

$567,000 $230,400
Normal spoilage as a percentage of good units  
15%

Degree of completion of normal spoilage  

100% 100%
Degree of completion of abnormal spoilage  

100% 100%










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

Reference no: EM13492220

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