Company uses process costing in its two production departments. The following information pertains to Department 2 for August 2022. a. Normal spoilage is 5% of good output; inspection and identification of spoilage takes place at 80% stage of completion; materials are added after inspection. b. Department 2 received 14,000 units from Department 1 at a cost of P168,000. Department 2 costs were P13,500 for materials and P105,400 for conversion costs. c. A total of 9,000 units were completed and transferred to finished goods. At the end of the month, 3,000 units were still in process, estimated to be 60% complete as to conversion costs. Determine the cost of abnormal spoilage.
Company uses
a. Normal spoilage is 5% of good output; inspection and identification of spoilage takes place at 80% stage of completion; materials are added after inspection.
b. Department 2 received 14,000 units from Department 1 at a cost of P168,000. Department 2 costs were P13,500 for materials and P105,400 for conversion costs.
c. A total of 9,000 units were completed and transferred to finished goods. At the end of the month, 3,000 units were still in process, estimated to be 60% complete as to conversion costs.
Determine the cost of abnormal spoilage.
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