Cracked Inc. manufactures a single product and uses the FIFO method of process costing. Direct materials are added at the beginning of the production process. Conversion costs are incurred evenly throughout production. Inspection takes place at the end of the production process. After inspection, some units are spoiled due to defects. Spoiled units generally constitute 2% of the good units transferred out (this is normal spoilage). Assume all spoilage is from the current month's production. Data provided for September is as follows: Units: WIP, beginning inventory WIP, ending inventory Started in September Good units completed and transferred out 12,500 5,700 54,000 58,500 Beginning work in process was 40% complete with respect to conversion. Ending work in process was 20% complete with respect to conversion. Costs: WIP, beginning inventory: $ 66,415 $ 37,622 Direct material cost Conversion costs Costs added: $160,920 $119,574 Direct material costs added Conversion costs added

Cracked Inc. manufactures a single product and uses the FIFO method of process costing. Direct materials are added at the beginning of the production process. Conversion costs are incurred evenly throughout production. Inspection takes place at the end of the production process. After inspection, some units are spoiled due to defects. Spoiled units generally constitute 2% of the good units transferred out (this is normal spoilage). Assume all spoilage is from the current month's production. Data provided for September is as follows: Units: WIP, beginning inventory WIP, ending inventory Started in September Good units completed and transferred out 12,500 5,700 54,000 58,500 Beginning work in process was 40% complete with respect to conversion. Ending work in process was 20% complete with respect to conversion. Costs: WIP, beginning inventory: $ 66,415 $ 37,622 Direct material cost Conversion costs Costs added: $160,920 $119,574 Direct material costs added Conversion costs added

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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