Reference no: EM132546615

Question - Assume that the Dream Corporation has two processing departments using sequential production flow: the Cleaning Department and the Milling Department. In the Cleaning Department direct material is introduced in the production process at the beginning of the production process. Conversion costs are incurred evenly throughout the production process. According to past experience of the company normal spoilage accounts 10% of good units completed and transferred out. The following table presents the summary activity performed in Cleaning Department during May. Work in process, May 1: 1,000 Units Direct material, 100% Complete, cost of* $4,000 Conversion costs, 80% Complete, cost of* 400 Balance in work in process, May 1* $4,400 Units started in May 9,000 Units Units completed during May and transferred out of the Cleaning department 7,400 Units Work in process, May 31: 1,600 Units Direct material, 100% Complete Conversion costs, 25% Complete Costs incurred During May: Direct material $27,000 Conversion costs $48,000 *These costs were incurred during the month of April.

Required: i. Determine the amount of normal and abnormal spoilage, and ii. Show the treatment of both using weighted average and First-in, First-out methods of process costing and pass the necessary journal entries.