Reference no: EM133022207

Question - A company produces canned sodas in a one process department. Direct materials are introduced at the beginning of the process and conversion costs are applied consistently throughout the process. Data for the current period are as follows:

Beginning work in process inventory 90,000 units (30% complete for conversion cost)

Units started in current period 520,000 units

Ending work in process inventory 114,000 units (60% complete for conversion cost)

Costs contained in beginning work in process inventory

Direct materials $205,500

Conversion costs $113,140

Costs added during current period

Direct materials $1,716,000

Conversion costs $1,128,540

Required -

a. Using the weighted average cost flow assumption: determine the equivalent unit cost, work in progress for direct material and conversion cost.

b. Using the FIFO cost flow assumption: determine the equivalent unit cost, work in progress for direct material and conversion cost.

c. Distinguish between normal and abnormal losses and explain how their accounting treatment differs.