Weighted average method, spoilage, equivalent units. (CMA, adapted) Consider the following data for November 2012 from Gray Manufacturing Company, which makes silk pennants and uses a process-costing sys- tem. 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 process. Spoiled units are disposed of at zero net disposal value. Gray Manufacturing Company uses the weighted average method of process costing. Physical Units Direct Conversion (Pennants) Materials Costs Work in process, November 10 1,000 $ 1,423 $ 1,110 Started in November 2012 ? Good units completed and transferred out during November 2012 9,000 Normal spoilage 100 Abnormal spoilage 50 Work in process, November 30 2,000 Total costs added during November 2012 $12,180 $27,750 "Degree of completion direct materials, 100%; conversion costs, 50% Degree of completion direct materials, 100%; conversion costs, 30% 1. Using WA method, answer the following questions. a. Compute equivalent units for DMs and Conversion costs. b. Summarize total cost to account for; calculate the cost per equivalent unit for DMs and Conversion costs; and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending working in process. 2. Using FIFO method, answer the following questions. a. Compute equivalent units for DMs and Conversion costs. b. Summarize total cost to account for; calculate the cost per equivalent unit for DMs and Conversion costs; and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending working in process.
