Process costing

The Flubber Rubber Co. uses a process costing system to account for the costs of two departments. Natural rubber is processed through a separation department that removes impurities and then moves to the refining department where it becomes polyisoprene. The refining department receives units from the separation department and applies conversion costs evenly throughout the process. Direct Materials are added when production is 65% complete, Inspection occurs when production is 100% complete. The following is additional information related to the refining department for the month of November 2016 - 2,000 units were in process at the beginning of November 2016. They were estimated to be 40% complete with respect to conversion costs. Costs associated with these units were as follows: - Transferred-in costs - $10,000; and - Conversion costs - $1,758 During November 2016, 37,000 units were received from the separation department at a cost of $185,000. - Actual costs incurred by the refining department during November were: Direct materials of $108,810; and - Conversion costs of $102,192 - During November, 32,000 units were completed and transferred to finished goods. Total spollage in November amounted to 3,000 units. Normal spoilage is 5% of all good units that pass inspection during November - At the end of November, there were 4,000 units in process, which were estimated to be 70% complete with respect to conversion costs. Required: 1. Use the FIFO method. For each cost category, compute equivalent units of work done Show physical units in the first column of your schedule. For each cost category, summarize total costs and calculate the cost per equivalent unit. Assign total costs to units completed and transferred out, to abnormal spoilage, and to units in ending work in process. (28 marks) For the question above show all necessary Journal entries. Dates and descriptions are not necessary 1 FIFO Journal Entries Account Description DR CR The Flubber Rubber Co. uses a process costing system to account for the costs of two departments. Natural rubber is processed through a separation department that removes impurities and then moves to the refining department where it becomes polyisoprene. The refining department receives units from the separation department and applies conversion costs evenly throughout the process. Direct Materials are added when production is 65% complete, Inspection occurs when production is 100% complete. The following is additional information related to the refining department for the month of November 2016 - 2,000 units were in process at the beginning of November 2016. They were estimated to be 40% complete with respect to conversion costs. Costs associated with these units were as follows: - Transferred-in costs - $10,000; and - Conversion costs - $1,758 During November 2016, 37,000 units were received from the separation department at a cost of $185,000. - Actual costs incurred by the refining department during November were: Direct materials of $108,810; and - Conversion costs of $102,192 - During November, 32,000 units were completed and transferred to finished goods. Total spollage in November amounted to 3,000 units. Normal spoilage is 5% of all good units that pass inspection during November - At the end of November, there were 4,000 units in process, which were estimated to be 70% complete with respect to conversion costs. Required: 1. Use the FIFO method. For each cost category, compute equivalent units of work done Show physical units in the first column of your schedule. For each cost category, summarize total costs and calculate the cost per equivalent unit. Assign total costs to units completed and transferred out, to abnormal spoilage, and to units in ending work in process. (28 marks) For the question above show all necessary Journal entries. Dates and descriptions are not necessary 1 FIFO Journal Entries Account Description DR CR