а)following information about the processcosts for Paula's Machines Ltd forDecember. Material is added at the startYou are provided with theof the process and conversion costs areincurred evenly throughout the process.Work in process(units) - 1 December250,000Units started inDecember1,250,000Units completedand transferred out1,200,000Normal spoilageunits duringmanufacturingWork in process(units) - 31December29,52060% completewith respectto conversion.Spoilage is normally detected 25% of theway through the manufacturing process.Tasksi. Prepare a schedule of equivalent units.i. Assume that the direct material cost perequivalent unit is $1.50 and the conversioncost per equivalent unit is $3.00. Calculate thetotal cost of finished goods for the month ofNovember.

Equivalent units are partly completed units converted into full unit to calculate the cost incurred…

Answered: of the process and conversio incurred…

Business

Accounting

of the process and conversio incurred evenly throughout t Work in process (units) - 1 December 25

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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Question

а)
following information about the process
costs for Paula's Machines Ltd for
December. Material is added at the start
You are provided with the
of the process and conversion costs are
incurred evenly throughout the process.
Work in process
(units) - 1 December
250,000
Units started in
December
1,250,000
Units completed
and transferred out
1,200,000
Normal spoilage
units during
manufacturing
Work in process
(units) - 31
December
29,520
60% complete
with respect
to conversion.
Spoilage is normally detected 25% of the
way through the manufacturing process.
Tasks
i. Prepare a schedule of equivalent units.
i. Assume that the direct material cost per
equivalent unit is $1.50 and the conversion
cost per equivalent unit is $3.00. Calculate the
total cost of finished goods for the month of
November.

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