The following data, in physical units, describe a grinding process for January:

Work in process, beginning	19,200
Started during current period	185,900
To account for	205,100
Spoiled units	12,400
Good units completed and transferred out	167,500
Work in process, ending	25,200
Accounted for	205,100

Inspection occurs at the 100% completion stage. Normal spoilage is 4% of the good units passing inspection.

Requirements

1.	Compute the normal and abnormal spoilage in units.
2.	Assume that the equivalent-unit cost of a spoiled unit is $8.

Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer.

Requirement 1. Compute the normal and abnormal spoilage in units.

Normal Spoilage ___ units

Abnormal Spoilage ___ units

Requirement 2. Assume that the equivalent-unit cost of a spoiled unit is $9. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected.

Abnormal Spoilage

Normal Spoilage

Potential Savings