Weighted-average method, spoilage. World Class Steaks is a meat-processing rm based in Texas. It operates under the weighted-average method of process costing and has two departments: preparation (prep) and shipping. For the prep department, conversion costs are added evenly during the process, and direct materials are added at the beginning of the process. Spoiled units are detected upon inspection at the end of the prep process and are disposed of at zero net disposal value. All completed work is transferred to the shipping department. Summary data for May follow: HomeInsertPage LayoutFormulasDataReviewViewPhysicalUnitsDirectConversionWorld Class Steaks: Preparation (Prep) DepartmentWork in process, beginning inventory (May 1)Degree of completion of beginning work in process4 Started during MayGood units completed and transferred out during MayWork in process, ending inventory (May 31)Degree of completion of ending work in process8 Total costs added during MayNormal spoilage as a percentage of good units10 Degree of completion of normal spoilage11 Degree of completion of abnormal spoilageMaterialsCosts7,200$ 10,632$ 2,7783100%50%60,00049,20010,080100%25%$111,000$89,66410%100%100%100%100%RequiredFor the prep department, summarize the total costs to account for and assign those costs to units completedand transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in pro-cess. (Problem 18-37 explores additional facets of this problem.)

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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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Weighted-average method, spoilage. World Class Steaks is a meat-processing rm based in Texas. It operates under the weighted-average method of process costing and has two departments: preparation (prep) and shipping. For the prep department, conversion costs are added evenly during the process, and direct materials are added at the beginning of the process. Spoiled units are detected upon inspection at the end of the prep process and are disposed of at zero net disposal value. All completed work is transferred to the shipping department. Summary data for May follow:

Home
Insert
Page Layout
Formulas
Data
Review
View
Physical
Units
Direct
Conversion
World Class Steaks: Preparation (Prep) Department
Work in process, beginning inventory (May 1)
Degree of completion of beginning work in process
4 Started during May
Good units completed and transferred out during May
Work in process, ending inventory (May 31)
Degree of completion of ending work in process
8 Total costs added during May
Normal spoilage as a percentage of good units
10 Degree of completion of normal spoilage
11 Degree of completion of abnormal spoilage
Materials
Costs
7,200
$ 10,632
$ 2,778
3
100%
50%
60,000
49,200
10,080
100%
25%
$111,000
$89,664
10%
100%
100%
100%
100%
Required
For the prep department, summarize the total costs to account for and assign those costs to units completed
and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in pro-
cess. (Problem 18-37 explores additional facets of this problem.)

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