Preparation of product cost and analyzing wastage

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Reference no: EM1315864

Preparation of Product Cost and analyzing Wastage, Spoilage.

Frank's Chips uses the weighted-average method to account for its WIP inventories. The accounting records show the following information for a particular day:

Beginning WIP inventory:

Direct materials ...................................................... $ 488

Conversion costs..................................................... 138

Current period costs in work in process

Direct materials..................................................... $5,720

Conversion costs ................................................... 3,322

Quantity information is obtained from the manufacturing records and includes the following.

Beginning inventory............................................ 150 units (partially complete)

Current period units started ............................... 1,000 units

Ending inventory ................................................. 300 units

Percentage of completion

Direct materials................................... 40%

Conversion costs .................................. 20%

Spot age ............................................................. 100 units

Percentage of completion

Direct materials ................................................. 100%

Conversion costs ................................................ 100%

Required:
Compute the cost of good units completed and transferred out, spoilage, and ending inventory using the eighted-average method.

Reference no: EM1315864

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