BUSI 294-Process Costing and Spoilage Kabana Industries manufactures

BUSI 294
Assignment – Process Costing and Spoilage Kabana Industries manufactures widgets in two stages. The first phase of production occurs in the
Assembly Department. Units are then transferred to the Finishing Department where the product is
finished and packaged for shipment to distributors. This question deals with the Finishing Department.
The Finishing Department adds material (Material “A”) to the widget as soon as it is received from the
Assembly Department. Packaging material (Material “B”) is added when the production is 95% complete.
Inspection takes place when production is 85% complete.
Following is the data recorded for the Finishing Department for the month of September:
Units of beginning work-in-process inventory
Units of ending work-in-process inventory
Percentage completion of units in beginning work-in-process inventory
Cost of Material “A” in beginning work-in-process inventory
Cost of Material “B” in beginning work-in-process inventory
Transferred-in cost in beginning work-in-process inventory
Conversions costs in beginning work-in-process inventory
Percentage completion of units in ending work-in-process inventory
Costs of Material “A” added in the month of September
Costs of Material “B” added in the month of September
Conversion costs added during September
Transferred-in costs added during September
Units started in September
Units completed and transferred to finished goods inventory 15,625
31,250
55%
$171,875
?
$187,500
$359,375
92%
$835,800
$93,750
$1,968,750
$1,317,975
109,375
78,125 Normal spoilage is 5% of all good units that pass inspection. The company pro-rates the normal spoilage
between cost of goods manufactured and ending work-in-process. The company uses the weighted
average method for cost assignment.
Required:
For September, prepare a production report, summarizing total costs to account for and assigning the
costs to units completed and transferred out, to abnormal spoilage and to units in ending work-inprocess.