LogicCo is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. LogicCo uses the FIFO method of process costing. Summary data and weighted-average data for September 2020 are as follows: (Click the icon to view the data.) (Click the icon to view the weighted-average data.) Read the requirements. Requirement 1. For each cost category, compute equivalent units. Show physical units in the first column. Enter the physical units in first, then calculate the equivalent units. (Complete all input fields. Enter a "0" for applicable zero amounts.) Flow of Production Work in process beginning Started during current period To account for Completed and transferred out during current period From beginning work in process Started and completed Normal spoilage Abnormal spoilage Work in process, ending Accounted for Physical Units Requirements 1. For each cost category, compute equivalent units. Show physical units in the first column. 2. Summarize total costs to account for; calculate cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. 3. Should LogicCo's managers choose the weighted-average method or the FIFO method? Explain. Print Done - X
LogicCo is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. LogicCo uses the FIFO method of process costing. Summary data and weighted-average data for September 2020 are as follows: (Click the icon to view the data.) (Click the icon to view the weighted-average data.) Read the requirements. Requirement 1. For each cost category, compute equivalent units. Show physical units in the first column. Enter the physical units in first, then calculate the equivalent units. (Complete all input fields. Enter a "0" for applicable zero amounts.) Flow of Production Work in process beginning Started during current period To account for Completed and transferred out during current period From beginning work in process Started and completed Normal spoilage Abnormal spoilage Work in process, ending Accounted for Physical Units Requirements 1. For each cost category, compute equivalent units. Show physical units in the first column. 2. Summarize total costs to account for; calculate cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. 3. Should LogicCo's managers choose the weighted-average method or the FIFO method? Explain. Print Done - X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:LogicCo is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are
spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. LogicCo uses the FIFO method of process costing. Summary data
and weighted-average data for September 2020 are as follows:
(Click the icon to view the data.)
(Click the icon to view the weighted-average data.)
Read the requirements.
Requirement 1. For each cost category, compute equivalent units. Show physical units in the first column.
Enter the physical units in first, then calculate the equivalent units. (Complete all input fields. Enter a "0" for applicable zero amounts.)
Flow of Production
Work in process beginning
Started during current period
To account for
Completed and transferred out during current period
From beginning work in process
Started and completed
Normal spoilage
Abnormal spoilage
Work in process, ending
Accounted for
Physical
Units
Requirements
1.
For each cost category, compute equivalent units. Show physical units in the
first column.
2. Summarize total costs to account for; calculate cost per equivalent unit for
each cost category; and assign costs to units completed and transferred
out (including normal spoilage), to abnormal spoilage, and to units in ending
work in process.
3. Should LogicCo's managers choose the weighted-average method or the
FIFO method? Explain.
Print
Done
-
X
Transcribed Image Text:Data table
A
1
2 Work in process, beginning inventory (September 1)
3
Degree of completion of beginning work in process
4 Started during September
5 Good units completed and transferred out during September
6
Work in process, ending inventory (September 30)
7 Degree of completion of ending work in process
8
Total costs added during September
9 Normal spoilage as a percentage of good units
10 Degree of completion of normal spoilage
11 Degree of completion of abnormal spoilage
B
Physical Units
(Computer Chips)
900 $
2,754
2,500
490
15%
$
C
Direct
Materials
125,766 $
100%
100%
619,650 $
100%
100%
D
Conversion
Costs
-
10,368
30%
10%
253,098
100%
100%
X
of the production process. Conversion costs are added evenly during the process. Some units of this product a
disposed of at zero net disposal value. LogicCo uses the FIFO method of process costing. Summary data
Weighted-average data
Cost per equivalent unit for work done to date
Cost of units completed and transferred out
Abnormal spoilage
Work in process, ending
Total costs accounted for
Total Production
Costs
$
$
$
822,250 $
82,654
103,978
1,008,882 $
Direct
Materials
204.00 $
586,500 $
58,956
99,960
745,416 $
Conversion
Costs
82.00
235,750
23,698
4,018
263,466
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