Response to the following problem:
Weighted-average method, inspection at 80% completion. (A. Atkinson) The Kim Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of process costing. In August, the following data were recorded for the Finishing Department:
|
Units of beginning work in process inventory
|
12,500
|
|
Percentage completion of beginning work in process units
|
25%
|
|
Cost of direct materials in beginning work in process
|
$0
|
|
Units started
|
87,500
|
|
Units completed
|
62,500
|
|
Units in ending inventory
|
25,000
|
|
Percentage completion of ending work in process units
|
95%
|
|
Spoiled units
|
12,500
|
|
Total costs added during current period:
|
|
|
Direct materials
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$819,000
|
|
Direct manufacturing labor
|
$794,500
|
|
Manufacturing overhead
|
$770,000
|
|
Work in process, beginning:
|
|
|
Transferred-in costs
|
$103,625
|
|
Conversion costs
|
$52,500
|
|
Cost of units transferred in during current period
|
$809,375
|
Conversion costs are added evenly during the process. Direct material costs are added when production is 90% complete. The inspection point is at the 80% stage of production. Normal spoilage is 10% of all good units that pass inspection. Spoiled units are disposed of at zero net disposal value. For August, summarize total costs to account for, and assign these costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work inprocess.