The following data, in physical units, describe a grinding process for January:

Work in process, beginning................................19,300

Started during current period............................145,400

To account for.............................................164,700

Spoiled units..................................................12,000

Good units completed and transferred out............128,000

Work in process, ending...................................24,700

Accounted for.............................................164,700

Inspection occurs at the 100% completion stage. Normal spoilage is 5% of the good units passing inspection.

Required:

1. Compute the normal and abnormal spoilage in units.

2. Assume that the equivalent-unit cost of a spoiled unit is $8. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer.

Answer rating: 100% (QA)

Solution 1 Good units completed 138000 Normal Spoil... View the full answer