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(7 points) (20-30 mins) Company X obtains fish and then processes them into f...
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(7 points) (20-30 mins) Company X obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to undetectable defects. Inspection occurs when units are 40% converted. Spoiled fillets generally constitute 6% of the good fillets. Data for April 2020 are as follows:
WIP, beginning inventory 1/4/2020
|
94 000
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fillets
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Direct materials (100% complete)
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|
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Conversion costs (50% compete)
|
|
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Started during April
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139 000
|
fillets
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Completed and transferred out 30/4/2020
|
185 000
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fillets
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WIP, ending inventory 30/4/2020
|
29 000
|
fillets
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Direct materials (100% complete)
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|
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Conversion costs (20% complete)
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|
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Costs for April:
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WIP, beginning inventory:
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|
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Direct materials
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€135 000
|
|
Conversion costs
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101 910
|
|
Direct materials added
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304 000
|
|
Conversion costs added
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389 130
|
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Calculate the total cost allocated to normal and abnormal spoilage using the weighted-average method of process costing. (Present all the necessary auxiliary calculations.)