Problem:
(Discrete spoilage; WA) Angelique Inc. makes stuffed angels in a mass-production process. Cloth and stuffing are added at the beginning of the production process; the angels are packaged in sky-blue boxes at the end of production. Conversion costs for the highly automated process are incurred evenly throughout processing. The angels are inspected at the 95 percent completion point prior to being boxed. Defective units of more than 1 percent of the units started is considered abnormal. The company uses a weighted average process costing system. June 2001 production and cost data for Angelique Inc. follow:
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Beginning inventory (40% complete as to conversion)
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5,000
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Started
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70,000
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Ending inventory (70% complete as to conversion)
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6,000
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Total defective units
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400
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Beginning inventory cloth and stuffing cost
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$ 21,900
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Beginning inventory conversion cost
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$ 7,680
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June cloth and stuffing cost
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$315,600
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June box cost
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$ 75,460
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June conversion cost
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$270,404
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a. How many units were completed in June?
b. How many of the defective units are considered a normal loss? An abnormal loss?
c. What is the per-unit cost of the completed units? What would the per-unit cost of the completed units have been if the 400 units had been good unitsat their same stagesofcompletion at the end of the period?
d. What is the total cost of ending inventory?