Question

In (Noon) Company, direct materials are added at the beginning of the production process. Conversion costs are incurred evenly throughout the production process. Before inspection, some units are spoiled due to undetectable materials defects. Inspection occurs when units are 60% converted. Spoiled units generally constitute 6% of the good units. Data for December 2019 are as follows: WIP, beginning inventory 12/1/2019 Direct materials 22,500 units (100% complete) Conversion costs (55% complete) Started during December 76,700 units Completed and transferred out 12/31/2019 72,500 units WIP, ending inventory 12/31/2019 18,400 units Direct materials (100% complete) Conversion costs (65% complete) What is the number of normal spoilage units?​

Answer 1

Answer:

Following are the responses to the given question:

Explanation:

Statement In December the computation of typical spoiling units shall be shown:

Particulars                                   Units

WIP Inventory Start on 12 January 2019      22,500

Departments began in December             76,700

Total stock available for both the month     99,200

Less: transferred units on 31 December 2019       72,500

Inventory of Less: WIP on 31 December 2019        18,400

Inventory of Balance (Normal Spoilage units)        8,300