Company X uses a process costing
system and computes cost using the weighted average. Inspection point is at 56%
of the production process. Company X presented the following information:

Which of the following is TRUE

Question

Company X uses a process costing
system and computes cost using the weighted average. Inspection point is at 56%
of the production process. Company X presented the following information:

Which of the following is TRUE

Answer

Normal Spoilage = $56,425

Answer

The degree of completion of EWIP is higher than 56%

Answer

Total manufacturing costs of the period are higher than $1,339,600 because the company incurred in additional costs related to the spoiled units

Answer

Inventoriable cost of a good completed unit = $882,250

Answer

None of the others

Assignment of costs
Costs before adding normal spoilage	$882,250
Normal spoilage on good completed units	$56,425
Total cost of good units and transferred out	$938,675
Abnormal spoilage	$33,855
EWIP before normal spoilage	$344,500
Normal spoilage on EWIP	$22,570
EWIP	$367,070
Total costs accounted for	$1,339,600

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