Reference no: EM132556365
Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units.
Data for December 2015 are as follows:
WIP, beginning inventory 12/1/2015 22700 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 77,000 units
Completed and transferred out 12/31/2015 72000 units
WIP, ending inventory 12/31/2015 18,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $151,000
Conversion costs 77,700
Direct materials added 228,400
Conversion costs added 299,000
Question 1: What cost is allocated to abnormal spoilage using the weighted-average process-costing method?