Use FIFO METHOD Hebert Industries uses a FIFO method ss costing system. Management has specified that the normal loss from shrinkage cannot exceed 3 percent of the units started in a period. All raw material is added at the start of the production process. Spoilage is determined upon inspection at the end of the production process. March processing information follows. Beginning WIP Inventory (30% complete as to conversion) Started during March Completed during March Ending WIP Inventory (20% complete as to conversion) 20,000 units 120,000 units 116,400 units 16,000 units a. How many total units are there to account for? b. How many units were spoiled during processing? Of the spoiled units, how many should be treated as a normal loss? As an abnormal loss? c. What are the equivalent units of production for direct material? For conversion?

Use FIFO METHOD Hebert Industries uses a FIFO method ss costing system. Management has specified that the normal loss from shrinkage cannot exceed 3 percent of the units started in a period. All raw material is added at the start of the production process. Spoilage is determined upon inspection at the end of the production process. March processing information follows. Beginning WIP Inventory (30% complete as to conversion) Started during March Completed during March Ending WIP Inventory (20% complete as to conversion) 20,000 units 120,000 units 116,400 units 16,000 units a. How many total units are there to account for? b. How many units were spoiled during processing? Of the spoiled units, how many should be treated as a normal loss? As an abnormal loss? c. What are the equivalent units of production for direct material? For conversion?

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

Cost Accounting.

Answer a, b, and c and provide solution. Use FIFO method

Use FIFO METHOD
Hebert Industries uses a FIFO method
ss costing system. Management has specified that the
normal loss from shrinkage cannot exceed 3 percent of the units started in a period. All raw material is
added at the start of the production process. Spoilage is determined upon inspection at the end of the
production process. March processing information follows.
Beginning WIP Inventory (30% complete as to conversion)
Started during March
Completed during March
Ending WIP Inventory (20% complete as to conversion)
20,000 units
120,000 units
116,400 units
16,000 units
a. How many total units are there to account for?
b. How many units were spoiled during processing? Of the spoiled units, how many
should be treated as a normal loss? As an abnormal loss?
c. What are the equivalent units of production for direct material? For conversion?|

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