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Determine the amount charged to Finished Goods for the period and the costs of spoilage charged to revenue.

Determine the amount charged to Finished Goods for the period and the costs of spoilage charged to revenue.

FINANCIAL ACCOUNTING
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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Determine the amount charged to Finished Goods for the period and the costs of spoilage charged to revenue. 

Daily Custom Company manufactures plastic chairs in its Processing Department. Direct materials are included at the inception of the process. Conversion costs are incurred evenly throughout the process. The machine broke down at 60% stage of completion due to inefficient operator that caused some of the units in process to be spoiled with no market value. Daily Custom Company uses FIFO in accumulating costs. Data provided for September of the current year are as follows Work in process, beg. Started Completed & transferred Work in process, end Costs: Work in Process, beg. Materials Conversion costs Added during the period: Materials Conversion costs 30,000 units 80,000 units 86,000 units 20,000 units P70,000 40,000 P160,000 122,480 Mat-100%; CC-89.5% Mat-100%; CC-75%
Transcribed Image Text:Daily Custom Company manufactures plastic chairs in its Processing Department. Direct materials are included at the inception of the process. Conversion costs are incurred evenly throughout the process. The machine broke down at 60% stage of completion due to inefficient operator that caused some of the units in process to be spoiled with no market value. Daily Custom Company uses FIFO in accumulating costs. Data provided for September of the current year are as follows Work in process, beg. Started Completed & transferred Work in process, end Costs: Work in Process, beg. Materials Conversion costs Added during the period: Materials Conversion costs 30,000 units 80,000 units 86,000 units 20,000 units P70,000 40,000 P160,000 122,480 Mat-100%; CC-89.5% Mat-100%; CC-75%
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