an Opening inventory (fully completed with respect direct material, 30 % with respect to labor and overhead) Started during the month Completed during the month Ending inventory (fully completed with respect to material, 80% completed with respect to labor and overhead) 2,000 units Cost incurred on materials (current and inventory) Cost incurred on labor and overhead (current and inventory) Total 15,000 units 13,000 units 1,500 units Inspection for spoiled units take place when units are 100% completed with respect to direct material, labor, and overhead. P80,000 112,000 P192,000
an Opening inventory (fully completed with respect direct material, 30 % with respect to labor and overhead) Started during the month Completed during the month Ending inventory (fully completed with respect to material, 80% completed with respect to labor and overhead) 2,000 units Cost incurred on materials (current and inventory) Cost incurred on labor and overhead (current and inventory) Total 15,000 units 13,000 units 1,500 units Inspection for spoiled units take place when units are 100% completed with respect to direct material, labor, and overhead. P80,000 112,000 P192,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![determined to be spoiled (normal or abnormal) and later sold after rework. The books
P11-5 Teacup Company manufactures quality tea. During production process some units are
and records showed following data for the month of July.
2,000 units
Opening inventory
(fully completed with respect direct material, 30 % with
respect to labor and overhead)
Started during the month
Completed during the month
Ending inventory
(fully completed with respect to material, 80%
completed with respect to labor and overhead)
15,000 units
13,000 units
1,500 units
Inspection for spoiled units take place when units are 100% completed with respect
direct material, labor, and overhead.
Cost incurred on materials (current and inventory)
Cost incurred on labor and overhead (current and inventory) 112,000
P80,000
Total
P192,000
Normal spoilage considered 10% of production cost
Normal spoilage able to be reworked considered 2% of spoiled units
Cost to complete reworked units is P3.00 per unit
Recovery value of spoiled units is P0.50 per unit
Required:
a.
Compute the cost per equivalent unit.
b.
Compute the total cost of batches.
C.
Compute the total cost of spoilage.
Assuming that rework has been completed, how much cost of rework will be
transferred to ending inventory?
d.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0ee7c06-2f28-4f33-acb4-c772126de0d2%2F60d8b044-d2f0-40c0-9ce4-35f8c17fc450%2Fxsct6rq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:determined to be spoiled (normal or abnormal) and later sold after rework. The books
P11-5 Teacup Company manufactures quality tea. During production process some units are
and records showed following data for the month of July.
2,000 units
Opening inventory
(fully completed with respect direct material, 30 % with
respect to labor and overhead)
Started during the month
Completed during the month
Ending inventory
(fully completed with respect to material, 80%
completed with respect to labor and overhead)
15,000 units
13,000 units
1,500 units
Inspection for spoiled units take place when units are 100% completed with respect
direct material, labor, and overhead.
Cost incurred on materials (current and inventory)
Cost incurred on labor and overhead (current and inventory) 112,000
P80,000
Total
P192,000
Normal spoilage considered 10% of production cost
Normal spoilage able to be reworked considered 2% of spoiled units
Cost to complete reworked units is P3.00 per unit
Recovery value of spoiled units is P0.50 per unit
Required:
a.
Compute the cost per equivalent unit.
b.
Compute the total cost of batches.
C.
Compute the total cost of spoilage.
Assuming that rework has been completed, how much cost of rework will be
transferred to ending inventory?
d.
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