Reference no: EM132547713
Anderson Plastics makes plastic rear lamps for cars. Spoiled units are detected upon inspection at the end of the process and are disposed of at zero net disposal price. Assume normal spoilage is 10% of the good output produced.
The following information about actual conversion costs for April is available:
Actual units Equivalent units Total costs
Work in progress, April 1 15,000 14,000 €145,600
Work done during April 29,000 28,000 308,000
To account for 44,000 42,000 €453,600
Good units completed and transferred 20,000 20,000 ?
out during April
Normal and abnormal spoilage 4,000 4,000 ?
Work in progress, April 30 20,000 18,000 ?
Question 1: Assume that Anderson uses the weighted-average method. What is the cost of normal spoilage for conversion costs for the month of April?
a) €21,600
b) €22,000
c) €43,200
d) €44,000
Question 2: Assume that Anderson uses the FIFO method. What is the cost of abnormal spoilage for conversion costs for the month of April?
a) €21,600
b) €22,000
c) €43,200
d) €44,000
Question 3: At the end of April, Department A at Tucson Company transferred all production to finished goods inventory. During May, the department started and fully completed 80 units. During June, beginning work in progress did not require any work with respect to direct materials and required 65% of conversion costs to be added. Manufacturing costs for May were as follows:
Direct materials $11,960,000
Conversion costs $ 9,752,000
The cost per equivalent unit for direct materials was $92,000.
How many units were brought into production in May?
a) 106
b) 130
c) 236
d) The number cannot be determined without knowing whether Tucson uses the FIFO approach or the weighted average cost approach to costing.