Chippity Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chippity uses the weighted-average method of process costing. Summary data for September are: (Click the icon to view the data.) Required 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. 2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. Requirement 1. For each cost category, calculate equivalent units. Show physical units in the first column of your schedule. Enter the physical units in first, and then calculate the equivalent units. Flow of Production Work in process beginning Started during current period To account for Completed and transferred out during current period Normal spoilage Abnormal spoilage Work in process, ending Accounted for Physical Units Data table Work in process, beginning inventory (Sept. 1) Degree of completion of beginning WIP Started during September Good units completed and transferred out during September Work in process, ending inventory (Sept. 30) Degree of completion of ending WIP Total costs added during September Normal spoilage as a percentage of good units Degree of completion of normal spoilage Degree of completion of abnormal spoilage Physical Units (computer chips) 1,100 2,500 2,050 200 15% Direct Conversion Materials Costs $96,280 $11,710 100% 30% 100% $581,900 100% 100% 35% $299,750 100% 100% X
Chippity Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chippity uses the weighted-average method of process costing. Summary data for September are: (Click the icon to view the data.) Required 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. 2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. Requirement 1. For each cost category, calculate equivalent units. Show physical units in the first column of your schedule. Enter the physical units in first, and then calculate the equivalent units. Flow of Production Work in process beginning Started during current period To account for Completed and transferred out during current period Normal spoilage Abnormal spoilage Work in process, ending Accounted for Physical Units Data table Work in process, beginning inventory (Sept. 1) Degree of completion of beginning WIP Started during September Good units completed and transferred out during September Work in process, ending inventory (Sept. 30) Degree of completion of ending WIP Total costs added during September Normal spoilage as a percentage of good units Degree of completion of normal spoilage Degree of completion of abnormal spoilage Physical Units (computer chips) 1,100 2,500 2,050 200 15% Direct Conversion Materials Costs $96,280 $11,710 100% 30% 100% $581,900 100% 100% 35% $299,750 100% 100% X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Chippity Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units
of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chippity uses the weighted-average
method of process costing. Summary data for September are:
(Click the icon to view the data.)
Required
1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule.
2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to
abnormal spoilage, and to units in ending work in process.
Requirement 1. For each cost category, calculate equivalent units. Show physical units in the first column of your schedule.
Enter the physical units in first, and then calculate the equivalent units.
Flow of Production
Work in process beginning
Started during current period
To account for
Completed and transferred out during current period
Normal spoilage
Abnormal spoilage
Work in process, ending
Accounted for
Physical
Units
Data table
Work in process, beginning inventory (Sept. 1)
Degree of completion of beginning WIP
Started during September
Good units completed and transferred out during
September
Work in process, ending inventory (Sept. 30)
Degree of completion of ending WIP
Total costs added during September
Normal spoilage as a percentage of good units
Degree of completion of normal spoilage
Degree of completion of abnormal spoilage
Physical Units Direct
(computer chips) Materials
1,100
$96,280
100%
2,500
2,050
200
15%
100%
$581,900
100%
100%
Conversion
Costs
$11,710
30%
35%
$299,750
100%
100%
-
X
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