Room-Builders makes modular cabins for Cruise Ships. Each cabin is identical. (Modular means that the cabins are like lego blocks)

Monthly information is as follows: Beginning of month End of month

Work in process Inventory: 100 units 50 units

Conversion: degree of completion in WIP 60% 70%

Direct Material Costs in Beginning WIP $ 830,000 ?

Conversion Costs in Beginning WIP $1,240,000 ?

During the month: Costs incurred for Direct Materials $29,975,000

Costs incurred for Conversion $26,235,000

At month end: 600 good units were completed, 8 units were spoiled

Direct Materials: 90% are added at the beginning of the process, the rest at Final Inspection

Conversion costs: Added evenly during the process.

Spoiled Units: Detected at Final Inspection (100% conversion)

Normal Spoilage = 1% of units started

Required:

1. Using FIFO, calculate:
   1. Ending WIP
   2. Cost of Goods Manufactured
   3. Spoilage expense

Answer rating: 100% (QA)

BI for materials is zero because although 90 were added at the beginning the 10 were ad... View the full answer