Open-ended question 1. Silver Spoon Incorporated is a manufacturer of kitchen ut

Question

Open-ended question 1. Silver Spoon Incorporated is a manufacturer of kitchen utensils. I produces all of its products in one department. The information for the current month is as follows: Beginning work in process Units started Units completed Ending work in process Spoilage 40,000 units 52,000 units 73,000 units 16,000 units 3,000 units Beginning work-in-process direct materials $30,000 Beginning work-in-process conversion Direct materials added during month Direct manufacturing labor during month $ 8,000 $126,400 560,480 Beginning work in process was 25% complete as to conversion, Direct materials are added at the beginning of the process. Factory overhead is applied at a rate equal to 40% of direct manufacturing labor. Ending work in process was 60% complete. All spoilage is normal and is detected at the end of the process. Production Cost Worksheet Physical units Direct materials Conversion Work in process, beginning Started during period To account for Food units completed Normal Spoilage Work in process, ending Accounted for Totals Direct Materials Convers osts in process, beginning sts added during period ork l costs to account for ed by equivalent units

Explanation / Answer

Flow of Production Physical units Direct materials Conversion Work in Process , beginning 40000 Statrted during the year 52000 to account for 92000 Goods completed 73000 73000 73000 Normal Spoiilage 3000 3000 3000 Work in process ending 16000 16000 9600 Accounted for 92000 92000 85600 Costs Work in process, beginning $                              38,000 $                      30,000 $                                    8,000 Costs added during the period $                           1,86,880 $                   1,26,400 $                                 60,480 Total Costs to account for $                           2,24,880 $                   1,56,400 $                                 68,480 Divided by equalent units 92000 85600 Equalents unit costs $                                   2.50 $                           1.70 $                                      0.80 Assignment of costs Amount in $ Costs transferred out 73000*$2.5 182500 Normal Spoilage 3000*$2.5 7500 Work in Progress Ending Direct materils 16000*$1.7 27200 Conversion   9600*$0.80 7680 Costs accounted for 224880

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