Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
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Chapter 18, Problem 18.41P
Weighted-average method, inspection at 80% completion. (A. Atkinson) The Horsheim Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of
| Units of beginning work-in-process inventory | 25,000 |
| Percentage completion of beginning work-in-process units | 25% |
| Units started | 175,000 |
| Units completed | 125,000 |
| Units in ending inventory | 50,000 |
| Percentage completion of ending work-in-process units | 95% |
| Spoiled units | 25,000 |
| Total costs added during current period: | |
| Direct materials | $1,638,000 |
| Direct manufacturing labor | $1,589,000 |
| Manufacturing |
$1,540,000 |
| Work in process, beginning: | |
| Transferred-in costs | $ 207,250 |
| Conversion costs | $ 105,000 |
| Cost of units transferred in during current period | $1,618,750 |
Conversion costs are added evenly during the process. Direct material costs are added when production is 90% complete. The inspection point is at the 80% stage of production. Normal spoilage is 10% of all good units that pass inspection. Spoiled units are disposed of at zero net disposal value.
- 1. For August, summarize total costs to account for and assign these costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
Required
- 2. What are the managerial issues involved in determining the percentage of spoilage considered normal? How would your answer to requirement 1 differ if all spoilage were treated as normal?
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Chapter 18 Solutions
Cost Accounting
Ch. 18 - Why is there an unmistakable trend in...Ch. 18 - Distinguish among spoilage, rework, and scrap.Ch. 18 - Normal spoilage is planned spoilage. Discuss.Ch. 18 - Costs of abnormal spoilage are losses. Explain.Ch. 18 - What has been regarded as normal spoilage in the...Ch. 18 - Units of abnormal spoilage are inferred rather...Ch. 18 - In accounting for spoiled units, we are dealing...Ch. 18 - Total input includes abnormal as well as normal...Ch. 18 - Prob. 18.9QCh. 18 - The unit cost of normal spoilage is the same as...
Ch. 18 - In job costing, the costs of normal spoilage that...Ch. 18 - The costs of rework are always charged to the...Ch. 18 - Abnormal rework costs should be charged to a loss...Ch. 18 - When is a company justified in inventorying scrap?Ch. 18 - How do managers use information about scrap?Ch. 18 - Prob. 18.16ECh. 18 - Prob. 18.17ECh. 18 - Prob. 18.18ECh. 18 - Prob. 18.19ECh. 18 - Prob. 18.20ECh. 18 - Prob. 18.21ECh. 18 - Prob. 18.22ECh. 18 - Prob. 18.23ECh. 18 - Prob. 18.24ECh. 18 - Prob. 18.25ECh. 18 - Prob. 18.26ECh. 18 - Prob. 18.27ECh. 18 - Prob. 18.28ECh. 18 - Prob. 18.29ECh. 18 - Prob. 18.30ECh. 18 - Prob. 18.31PCh. 18 - Prob. 18.32PCh. 18 - Prob. 18.33PCh. 18 - Prob. 18.34PCh. 18 - Prob. 18.35PCh. 18 - Prob. 18.36PCh. 18 - Prob. 18.37PCh. 18 - Prob. 18.38PCh. 18 - Prob. 18.39PCh. 18 - Prob. 18.40PCh. 18 - Weighted-average method, inspection at 80%...
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