Question: Hebert Industries uses a weighted average process costing system. Management has specified that the normal loss from shrinkage cannot exceed 3 percent of the units

Hebert Industries uses a weighted average process costing system. Management has specified that the normal loss from shrinkage cannot exceed 3 percent of the units started in a period. All raw material is added at the start of the production process. Spoilage is determined upon inspection at the end of the production process. March processing information follows.

Beginning WIP Inventory (30% complete as to conversion)... 180,000 units Started during

a. How many total units are there to account for?

b. How many units were spoiled during processing? Of the spoiled units, how many should be treated as a normal loss? As an abnormal loss?

c. What are the equivalent units of production for direct material? For conversion?

d. How are costs associated with the company's normal spoilage handled?

e. How are costs associated with the company's abnormal spoilage handled?

Beginning WIP Inventory (30% complete as to conversion)... 180,000 units Started during March..... Completed during March Ending WIP Inventory (20% complete as to conversion). 120,000 units 116,400 units 16,000 units

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