Disposition Cost
Not what you're looking for?
In the lamination department, varnish is added when the goods are 60% complete as to overhead. The units that are spoiled during processing are found upon inspection at the end of production. Spoilage is considered discrete.
Production Data For March
Beg.Inv.(80% complete as to labor,
70% complete as to overhead): 1,000 units
Transferred in during month 7,450 units
End. Inv.(40% complete as to labor
20% complete as to Overhead) 1,500 units
Normal Spoilage(found in final inspec) 100 units
Abnormal Spoilage(Found @ 30%completion
of direct labor & 15% of conversion) 200 units
All other units were transferred to finished Goods.
Cost Data For March
BWIP Inventory:
Prior Department Costs $7,510
Varnish 950
Direct Labor 2,194
Overhead 5,522
_________
$16,176
Current Period Costs:
Prior department costs $68,540
Varnish 7,015
Direct labor 23,000
Overhead 56,782
__________
$155,337
_________
Total costs to account for $171,513
REQUIRED: Determine the proper disposition of the March costs for the Laminating Department using the Weighted Average Method.
Purchase this Solution
Solution Summary
This solution determines the proper cost of disposition (spoilage) using a weighted average method.
Solution Preview
Number of complete units made and transferred = 1,000 + 7,450 - 1,500 - 100 - 200 = 6,650.
<br>
<br>The number of units with prior department costs = 1,000 + 7,450 = 8,450.
<br>The total prior department costs = $7,510 + $68,540 = $76,050.
<br>The prior department cost per unit = $76,050 / 8,450 = $9.00.
<br>
<br>Equivalent full labor units = 1,000 + 7,450 - (0.6 * 1,500) - (0.7 * 200) = 7,410.
<br>This is calculated as follows: there are 1,000 + 7,450 = 8,450 ...
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Motivation
This tests some key elements of major motivation theories.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.