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

Work in process, beginning ............ 18,600

Started during current period ............189,000

To account for .................207,600

Spoiled units ................. 12,600

Good units completed and transferred out ......170,000

Work in process, ending ............. 25,000

Accounted for .................207,600

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

Required

1. Compute the normal and abnormal spoilage in units.

2. Assume that the equivalent- unit cost of a spoiled unit is $ 11. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on your answer.