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Question 2:

3) Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process. The normal spoilage rate is calculated as 10% of good units completed. The cost of the beginning work-in-process in the Month of May is $3,000,000, including $1,600,001 of input of materials, 100,000 units, and $1,400,000 for conversion costs. The beginning work-in-process is 70% complete. During May, the input includes $7,400,000 for materials, 800,000 units started and $4,190,000 for conversion costs. There were 700,000 good units finished. In addition, the ending work-in-process i May is 100,000 units with 60% complete. The abnormal spoilage is 30,000 units. All spoilage occurred when all processing was complete, at the final inspection. Required: Use the weighted average method to calculate: (a) The dollar value of abnormal spoilage. (b) The cost of the good units finished. (c) The cost of ending work-in-process inventory. 4) Downton Tractor Company manufactures small tractors on an assembly-line basis. The units are started in Department Y. On January 1 of this year, the Work-in-Process inventory of Department Y consisted of 200 units 100% complete as to materials and 20% complete as to conversion. During the month, 800 units were started and 500 units were completed and transferred out. The Work-in-Process on January 31 was 100% complete as to materials and 20% complete as to conversion. Costs in process at the beginning of the period amounted to $100,000 for materials and $25,000 for conversion. Costs added during the period were materials costs of $200,000 and conversion costs of $143,000. Required: Prepare a production cost report using the weighted average method