4) Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are added...
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Accounting
4)
Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are added at the beginning of the process and conversion costs are incurred evenly throughout the production cycle. Inspection takes place at the end of the process and spoiled units generally constitute 4% of the good units. Data provided for February are as follows:
WIP, beginning inventory February 1
25,000 units
Direct materials (100% complete)
Conversion costs (50% complete)
Started during February
82,000 units
Completed and transferred out
81,000 units
WIP, ending inventory February 28
15,000 units
Direct materials (100% complete)
Conversion costs (25% complete)
Costs:
WIP, beginning inventory:
Direct materials
$150,000
Conversion costs
44,000
Direct materials added
209,916
Conversion costs added
109,893
What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing?
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