Reference no: EM132609817
Sandhill's Closet mass-produces luxurious sleepwear for women. Consider the following data for the flannel nightgown department for the month of January. All direct materials are added at the beginning of production in the department, and conversion costs are incurred evenly throughout production. Inspection occurs when production is 100% completed. Normal spoilage is 7,000 units for the month.
Physical Units
Beginning WIP (25% complete) 11,800
Started during January 74,000
Total to account for 85,800
Good units completed and transferred out during current period:
From beginning work in process 11,800
Started and completed 53,000
Spoiled units 9,000
Ending WIP (75% complete) 12,000
Total accounted for 85,800
Costs Beginning WIP:
Direct materials $216,000
Conversion costs 26,000
Total beginning WIP 242,000
Costs added during current period:
Direct materials 1,924,000
Conversion costs 924,000
Costs to account for $3,090,000
Question 1: Make a material flow cost report using the FIFO method. Assume that the production process wastes 10% of all raw materials before taking into account spoilage. For simplicity, do not adjust the costs for beginning work in process.