In July, the Assembly department of Mercury Manufacturing began the month with 1,200 units in...
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In July, the Assembly department of Mercury Manufacturing began the month with 1,200 units in work-in-process inventory (75% complete). During the month, 14,000 units were transferred in, with costs of $114,000 attached to them from the Molding department. During the month, 15,000 units were completed, 800 of which were spoiled. Spoilage is normally 5% of good output. Ending WIP was 30% complete. In the Assembly department, all direct materials are added when the product is 50% complete, and conversion costs are applied evenly throughout the process. The value of beginning WIP inventory was $18,880 ($7,600 in costs transferred from Molding, $3750 in DM costs, and $7,530 in conversion costs). During July, $15,000 in DM costs and $33,885 conversion costs were incurred in the Assembly department. 1. Assuming that Mercury Manufacturing uses the weighted-average method of process costing, find the value of units completed and transferred out, ending WIP, and the loss caused by abnormal spoilage for the Assembly department.
Answers are:
Completed: $178,920
EWIP: $1,765
Abnormal spoilage: $1,080
I am just not sure as to how to come to these conclusions.
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