The Corporation ProCom is dedicated to fabricating nano robots equipment. Each equipment goes through 2 processes/departments: Configuration and Termination. In both processes, the costs of conversion are incurred uniformly throughout the whole process. ALL the direct materials are added to the beginning of Configuration and in the Termination process, all the direct materials are added at the end. Although the exercises have the information for the first process, you only must answer problems related to the Termination process. Use the FIFO method to resolve the problems. The information included is for the month of April 2021. 

 

In both processes, Configuration and Termination, the initial inventory in process (BWIP) is 80% completed, meanwhile the final inventory in process (FWIP) is 25% completed. All the good, completed units are transferred to the next process or to the warehouse. That is where the spoilage is detected and are discarded to the trash. The Normal Spoilage is calculated in this following way: 

Configuration: 10% of the good units that passed the inspection

Termination: 5% of the good units that passed the inspection

 

The following table contains the information of units and costs for the month of April 2021 for both processes. Use the FIFO method. 

 

	Configuration	Termination
BWIP
TC	0	$12,900
DM	$2,000	0
CC	$1,600	$4,900
Total	$3,600	$17,800
Current Costs
TC	0	?
DM	$18,000	$1,280
CC	$16,000	$9,900
Transferred cost with good, completed units	$32,560
Physical units of inventory
BWIP	2,000	6,000
Units started in November	18,000	?
Good, completed and transferred units	14,800	12,000
Total Spoilage	2000	800

 

How much is the production equivalent of initial inventory for the Termination process?

a.            TC 0 DM 400 CC 400

b.            TC 1,600 DM 1,600 CC 400

c.             TC 0 DM 2,000 CC 400

d.            TC 2,000 DM 2,000 CC 400

Answer rating: 100% (QA)

Option B is correct TC 1600 DM 1600 CC 400 Normal spoilag... View the full answer