Atlantic Manufacturing Company Uses Process Costing

question 37

Essay

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 $1,600,000 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 in 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.

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Definitions:

Calvin Coolidge

The 30th President of the United States, known for his quiet demeanor and a laissez-faire approach to government.

Investment

The action or process of investing money for profit or material result.

Altruism

The selfless concern for the well-being of others without expecting anything in return.

Hegel

A German philosopher known for his dialectical method and the concept of the Absolute Spirit, emphasizing the historical development of consciousness and reality.