Question - Blackmon Company introduces material at the beginning of operations in its process while adding conversion cost evenly throughout production. The following data are available for one period:
Units started into production 9000 Units
Units transferred to finished goods 7500 Units
Beginning inventory (20 % processed) 600 Units
Ending inventory (40% processed) 700 Units
Current material cost $18,000
Current Conversion cost 12,500
Material cost in beginning inventory 1,200
Conversion cost in beginning inventory 220
A total of 30% of the lost units were due to abnormal conditions. Inspections is at the 50% stage of operations.
a) Using the Weighted Average method: prepare a production report.
b) Prepare the journal entries to transfer cost to finished goods.
c) Prepare the journal entry to write-off the abnormal cost.