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BUSI 294 Assignment – Process Costing and Spoilage

24 / 01 / 2019 Assignments

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BUSI 294 Assignment – Process Costing and Spoilage

BUSI 294Assignment – Process Costing and SpoilageKabana Industries manufactures widgets in two stages. The first phase of production occurs in theAssembly Department. Units are then transferred to the Finishing Department where the product isfinished and packaged for shipment to distributors. This question deals with the Finishing Department.The Finishing Department adds material (Material “A”) to the widget as soon as it is received from theAssembly Department. Packaging material (Material “B”) is added when the production is 95% complete.Inspection takes place when production is 85% complete.Following is the data recorded for the Finishing Department for the month of September:Units of beginning work-in-process inventoryUnits of ending work-in-process inventoryPercentage completion of units in beginning work-in-process inventoryCost of Material “A” in beginning work-in-process inventoryCost of Material “B” in beginning work-in-process inventoryTransferred-in cost in beginning work-in-process inventoryConversions costs in beginning work-in-process inventoryPercentage completion of units in ending work-in-process inventoryCosts of Material “A” added in the month of SeptemberCosts of Material “B” added in the month of SeptemberConversion costs added during SeptemberTransferred-in costs added during SeptemberUnits started in SeptemberUnits completed and transferred to finished goods inventory15,62531,25055%$171,875?$187,500$359,37592%$835,800$93,750$1,968,750$1,317,975109,37578,125Normal spoilage is 5% of all good units that pass inspection. The company pro-rates the normal spoilagebetween cost of goods manufactured and ending work-in-process. The company uses the weightedaverage method for cost assignment.Required:For September, prepare a production report, summarizing total costs to account for and assigning thecosts to units completed and transferred out, to abnormal spoilage and to units in ending work-inprocess.


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