(CMA,adapted) Consider the following data for November 2003 from Gray Manufacturing Company, which makes silk pennants and uses a process-costing system, All direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the prcoess. Spoiled units are disposed of at zero net disposal value. Gray Manufacturing Company uss the weighted-average method of process costing.
Physical Units Direct Conversion
(Pennants) Materials Costs
Work in process, Nov. 1* 1,000 $1,423 $1,110
Started in Nov. 2003 ?
Good units completed and transferrred out
during November 2003 9,000
Normal spoilage 100
Abnormal spoilage 50
Work in process, November 30** 2,000
Costs added during November 2003 $12,180 $27,750
*Degree of completion: direct materials, 100%; conversion costs, 50%
**Degree of completion: direct materials, 100%; conversion costs, 30%
Compute equivalent units for direct materials and conversion costs. Show physical units in the firs column of your schedule.
The solution explains how to calculate the equivalent units