Question: please help to answer question 1c & d only thank you very much Question 1 (30 marks) Future Lab Technology (Future Lab) manufactures a chemical
Question 1 (30 marks) Future Lab Technology (Future Lab) manufactures a chemical product. Each unit will pass through the mixing process. All direct materials are applied at the beginning of the process and conversion costs are added evenly during the process. Inspection occurs at the 60% stage of production. Normal spoilage is 5% of all good units that pass inspection. Spoilage units are disposed of at zero net disposal value. The company adopts the weighted average method of process costing. Data of the mixing process for May 2019 are as follows: Physical units 21,875 134,375 Direct materials $200,000 Conversion costs $187,750 Work in process, beginning inventory(1 May) Started during May Good units completed and transferred out during May Work in process, ending inventory (31 May) Total costs added during May 17,500 $1,675,000 $980,250 Degree of completion of beginning work in process Degree of completion of closing work in process 90% 80% Required: a) (8 marks) For May 2019, show the physical units and compute the equivalent units for each of the cost category. b) (9 marks) Also for May 2019, summarize total costs to account for and assign these costs to: (i) units completed and transferred out (including normal spoilage); (ii) abnormal spoilage; (iii) units in ending working in process. c) (6 marks) If Future Lab uses the first-in, first out (FIFO) method of process costing, what would be the cost per equivalent unit for each of the cost category? d) (5 marks) Assuming Future Lab's management focuses mainly on planning and control, should the company choose the weighted average method or the FIFO method? Explain with reference to characteristic of both process costing methods in term of computations of cost per equivalent unit and assigning costs to output units
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