Manufacturing is a furniture manufacturer with two departments: Moulding 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...................... $819,000
Direct manufacturing labour................. $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 materials 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.
REQUIRED
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 in process.