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Part $1$

ChipheadChiphead

is a$$ fast$-$growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Suppose

ChipheadChiphead

determines standard costs of

$ $280$$$280$

per equivalent unit for direct materials and

$ $70$$$70$

per equivalent unit for conversion costs for both beginning work in process and work done in the current period. Summary data and$$ weighted$-$average data for

SeptemberSeptember

$20202020$

are as$$ follows:

Data table

$$

A

B

C

D

$1$

$$

Physical Units $($Computer Chips$)$

Direct Materials

Conversion Costs

$2$

Work in process, beginning inventory $($September $1)$

$600$

$$83,136$

$$12,166$

$3$

Degree of completion of beginning work in process

$$

$100\%$

$30\%$

$4$

Started during September

$2,676$

$$

$$

$5$

Good units completed and transferred out during September

$2,200$

$$

$$

$6$

Work in process, ending inventory $($September $30)$

$460$

$$

$$

$7$

Degree of completion of ending work in process

$$

$100\%$

$30\%$

$8$

Total costs added during September

$$

$$575,340$

$$233,016$

$9$

Normal spoilage as a percentage of good units

$15\%$

$$

$$

$10$

Degree of completion of normal spoilage

$$

$100\%$

$100\%$

$11$

Degree of completion of abnormal spoilage

$$

$100\%$

$100$

Weighted$-$average data

Total Production

Direct

Conversion

$$

$$

Costs

Materials

Costs

Cost per equivalent unit for work done to date

$$201\mathrm{.}00$

$$83\mathrm{.}00$

Cost of units completed and transferred out

$$718,520$

$$508,530$

$$209,990$

Abnormal spoilage

$81,224$

$57,486$

$23,738$

Work in process, ending

$103,914$

$92,460$

$11,454$

Total costs accounted for

$$903,658$

$$658,476$

$$245,182$

Complete requirements $1$ and $2$ using the$$ standard$-$costing method.

$1.$

For each cost$$ category, compute equivalent units. Show physical units in the first column.

$2.$

Summarize total costs to account$$ for; calculate cost per equivalent unit for each cost$$ category; and assign costs to units completed and transferred out$($including normal$$ spoilage$),$ to abnormal$$ spoilage, and to units in ending work in process.

$3.$

What issues should the manager focus on when reviewing the equivalent units$$ calculations? Requirement $1.$ For each cost category, compute equivalent units. Show physical units in the first column. Use the standard$-$costing method.

Enter the physical units in first, then calculate the equivalent units. $($Complete all input fields. Enter a $"0"$ for applicable zero amounts.$)$

Physical

Flow of Production

Units

Work in process beginning

Started during current period

To account for

Completed and transferred out during current period

From beginning work in process

Started and completed

$-$