Reference no: EM131672418

Question: FIFO method, spoilage. Refer to the information in Exercise.

1. Do Exercise using the FIFO method of process costing.

2. Should LogicCo's managers choose the weighted-average method or the FIFO method? Explain briefly.

Exercise: Weighted-average method, spoilage. LogicCo is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. LogicCo uses the weightedaverage method of process costing. Summary data for September 2017 are as follows:

1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule.

2. Summarize the total costs to account for; calculate the cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.