Chapter 18

18-33 (30 min.) Weighted-average method, spoilage.

Solution Exhibit 18-33 summarizes total costs to account for, calculates the equivalent
units of work done to date for each cost category, and assigns total costs to units
completed (including normal spoilage), to abnormal spoilage, and to units in ending
work in process using the weighted-average method.

SOLUTION EXHIBIT 18-33

Weighted-Average Method of Process Costing with Spoilage;
Cleaning Department of Windsor Company for May.

PANEL A: Summarize Output in Physical Units and Compute Output in Equivalent

Units

Equivalent Units
Physical Direct Conversion
Flow of Production Units Materials Costs
Work in process, beginning (given) 2,500
Started during current period (given) 22,500
To account for 25,000
Good units completed and transferred out
during current period: 18,500 18,500 18,500
Normal spoilage*
1,850 u 100%; 1,850 u 100% 1,850 1,850 1,850
Abnormal spoilage
650 u 100%; 650 u100% 650 650 650
Work in process, ending (given)
4,000 u 100%; 4,000 u 25% 4,000 4,000 1,000
Accounted for
Work done to date 25,000 25,000 22,000

*Normal spoilage is 10% of good units transferred out: 10% u 18,500 = 1,850 units. Degree of completion of normal
spoilage in this department: direct materials, 100%; conversion costs, 100%.
Total spoilage = 2,500 + 22,500 18,500 4,000 = 2,500 units; Abnormal spoilage = 2,500 1,850 = 650 units. Degree of

completion of abnormal spoilage in this department: direct materials, 100%; conversion costs, 100%.
Degree of completion in this department: direct materials, 100%; conversion costs, 25%.

869 Copyright 2010 Pearson Education Canada

Instructors Solutions Manual for Cost Accounting, 5Ce

18-33 (contd)
SOLUTION EXHIBIT 18-33 (contd)

PANEL B: Summarize Total Costs to Account for, Compute Cost per Equivalent Unit,
and Assign Total Costs to Units Completed, to Spoiled Units, and to Units in Ending
Work in Process

Total
Production Direct Conversion
Costs Materials Costs
Work in process, beginning (given) $ 4,500 $ 2,500 $ 2,000
Costs added in current period (given) 42,500 22,500 20,000
Total costs to account for $47,000 $25,000 $22,000

Costs incurred to date $25,000 $22,000

Divided by equivalent units of work done to date y25,000 y22,000
Cost per equivalent unit $ 1 $ 1

Assignment of costs:
Good units completed and transferred out (18,500 units):
Costs before adding normal spoilage $37,000 (18,500# u $1) + (18,500# u $1)
Normal spoilage (1,850 units) 3,700 (1,850# u $1) + (1,850# u $1)
(A) Total costs of good units completed and
transferred out 40,700
(B) Abnormal spoilage (650 units) 1,300 (650# u $1) + (650# u $1)
(C) Work in process, ending (4,000 units) 5,000 (4,000# u $1) + (1,000# u $1)
(A)+(B)+(C) Total costs accounted for $47,000 $25,000 + $22,000

#Equivalent units of direct materials and conversion costs calculated in Panel A above.

Copyright 2010 Pearson Education Canada 870

 Chapter 18

18-34 (25 min.) FIFO method, spoilage.

For the Cleaning Department, Solution Exhibit 18-34 summarizes the total costs for
May, calculates the equivalent units of work done in the current period for direct
materials and conversion costs, and assigns total costs to units completed and
transferred out (including normal spoilage), to abnormal spoilage, and to units in
ending work in process under the FIFO method.

SOLUTION EXHIBIT 18-34

First-in, First-out (FIFO) Method of Process Costing with Spoilage;
Cleaning Department of Windsor Company for May.
PANEL A: Summarize Output in Physical Units and Compute Output in Equivalent
Units

Equivalent Units
Physical Direct Conversion
Flow of Production Units Materials Costs
Work in process, beginning (given) 2,500
Started during current period (given) 22,500
To account for 25,000
Good units completed and transferred out during current
period:
From beginning work in process|| 2,500
2,500 u (100% 100%); 2,500 u (100%  80%) 0 500
Started and completed 16,000#
16,000 u 100%; 16,000 u 100% 16,000 16,000
Normal spoilage* 1,850
1,850 u 100%; 1,850 u 100% 1,850 1,850
Abnormal spoilage 650
650 u 100%; 650 u 100% 650 650
Work in process, ending 4,000
4,000 u 100%; 4,000 u 25% _____ 4,000 1,000
Accounted for 25,000 _____ _____
Work done in current period only 22,500 20,000

|| Degree of completion in this department: direct materials, 100%; conversion costs, 80%.
#18,500 physical units completed and transferred out minus 2,500 physical units completed and transferred out from
beginning work-in-process inventory.
*Normal spoilage is 10% of good units transferred out: 10% u 18,500 = 1,850 units. Degree of completion of normal
spoilage in this department: direct materials, 100%; conversion costs, 100%.
Total spoilage = 2,500 + 22,500 18,500 4,000 = 2,500 units

Abnormal spoilage = 2,500 1,850 = 650 units. Degree of completion of abnormal spoilage in this department: direct
materials, 100%; conversion costs, 100%.
Degree of completion in this department: direct materials, 100%; conversion costs, 25%.

871 Copyright 2010 Pearson Education Canada

Instructors Solutions Manual for Cost Accounting, 5Ce

18-34 (contd)

SOLUTION EXHIBIT 18-34 (contd)

PANEL B: Summarize Total Costs to Account for, Compute Cost per Equivalent Unit, and
Assign Total Costs to Units Completed, to Spoiled Units, and to Units in Ending Work in
Process
Total
Production Direct Conversion
Costs Materials Costs
Work in process, beginning (given) $ 4,500 $ 2,500 $ 2,000
Costs added in current period (given) 42,500 22,500 20,000
Total costs to account for $47,000 $25,000 $22,000

Costs added in current period $22,500 $20,000

Divided by equivalent units of work done in current
period y22,500 y20,000
Cost per equivalent unit $ 1 $ 1

Assignment of costs:
Good units completed and transferred out (18,500
units):
Work in process, beginning (2,500 units) $ 4,500 $2,500 + $2,000
Costs added to beg. WIP in current period 500 (0 u $1) + (500 u $1)
Total from BI before normal spoilage 5,000
Started & completed before normal spoilage (16,000) 32,000 (16,000 u $1) + (16,000 u $1)
Normal spoilage (1,850 units) 3,700 (1,850 u $1) + (1,850 u $1)
(A) Total costs of good units completed and 40,700
transferred out
(B) Abnormal spoilage (650 units) 1,300 (650 u $1) + (650 u $1)
(C) Work in process, ending (4,000 units) 5,000 (4,000 u $1) + (1,000 u $1)
(A)+(B)+(C) Total costs accounted for $47,000 $25,000 + $22,000

Equivalent units of direct materials and conversion costs calculated in Panel A.

Copyright 2010 Pearson Education Canada 872