**Cracked Inc. Process Costing Details**Cracked Inc. manufactures a single product and uses the **FIFO method** of process costing. Here’s a breakdown of their production process:### Production Details:- **Direct Material Addition:** Added at the beginning of the process.- **Conversion Costs:** Incurred evenly throughout production.**Inspection:** Conducted at the end of the production process. Units found spoiled are due to defects and are categorized as spoilage.**Spoilage Details:**- Normal spoilage generally constitutes 2% of the good units transferred out.- This spoilage assumption applies to the current month’s production only.### Data for September:#### Units:- **WIP (Work in Progress), Beginning Inventory:** 12,500 units- **WIP, Ending Inventory:** 5,700 units- **Units Started in September:** 54,000 units- **Good Units Completed and Transferred Out:** 58,500 units**Completion Percentage:**- **Beginning WIP:** 40% complete for conversion.- **Ending WIP:** 20% complete for conversion.#### Costs:- **WIP, Beginning Inventory:** - Direct Material Cost: $66,415 - Conversion Costs: $37,622- **Costs Added:** - Direct Material Costs: $160,920 - Conversion Costs: $119,574### Problem 5:Determine the number of units included in abnormal spoilage for September.**Options:**a. 1,130 units b. 970 units c. 1,220 units d. 1,084 units e. 1,380 units f. 1,170 units g. 1,280 units h. None of the above This information can be used to calculate spoilage and determine production efficacy within a manufacturing setup.

WIP, Beginning Inventoy 12,500 Units Add: Started in September 54,000 Units Total unit available (12,500 + 54,000) 66,500 Units Less: Goods Completed and transferred out 58,500 Units Required WIP, ending inventory (66,500 - 58,500) 8,000 Units Less: Actual WIP, ending inventory 5,700 Units Total spoilage (8,000 - 5,700) 2,300 Units Less: Normal spoiled units (58,500 * 2%) 1,170 Units Abnormal spoitage for September (2,300 - 1,170) 1,130 UnitsCorrect answer is option a. 1,130 units

Business

Accounting

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 5. How many units will be included in abnormal spoilage for September? a. 1,130 units b. 970 units c. 1,220 units d. 1,084 units e. 1,380 units f. 1,170 units g. 1,280 units h. None of the above

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 5. How many units will be included in abnormal spoilage for September? a. 1,130 units b. 970 units c. 1,220 units d. 1,084 units e. 1,380 units f. 1,170 units g. 1,280 units h. None of the above

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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Cranbrook Textiles Company makes silk banners and uses the weighted-average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value. (Click the icon to view the process costing data.) Determine the equivalent units of work done in July, and calculate the cost of units completed and transferred out (including normal spoilage), the cost of abnormal spoilage, and the cost of units in ending inventory. - X Data table Physical Units Direct Conversion Enter the physical units in first, then calculate the equivalent units. (Banners) Materials Costs 1,300 $195,000 $8,000 Work in process, (July 1)" Started in July 2020 Good units completed and transferred out in July Normal spoilage Abnormal spoilage Physical 37,500 20,500 9,000 Flow of Production Units Work in process beginning…