Nouveaux Toys Inc., manufactures plastic rubber ducks. In June,Nouveaux reported the following data:

a. All direct materials are added at the beginning of theprocess.

b. Beginning work-in-process consisted of 3,000 units, 30percent complete with respect to direct labor and overhead. Costsin beginning inventory included direct materials, $450; andconversion costs, $138.

c. Costs added to production during the month were directmaterials, $950; and conversion costs, $2,174.50.

d. Inspection takes place at the end of the process. Malformedunits are discarded. During normal operations, 0.5% of the unitsstarted will end up being malformed and discarded.

e. During the month, 7,000 units were started and 8,000 goodunits were transferred out to Finishing. All other units finishedwere malformed and discarded. There were 1,000 units that remainedin ending work in process, 55 percent complete.

f. Remember to round your decimal points to four places forcost/EU rates.

Required: A. Prepare a physical unit flow schedule.

B. Calculate the 1) cost of goods transferred out, 2) endingwork-in-process, and 3) loss due to spoilage using the weightedaverage method.

C. Prepare the journal entries to record 1) and 3) above.Reconcile these journal entries with beginning work in process toensure that ending work in process matches 2).

D. Calculate the 1) cost of goods transferred out, 2) endingwork-in-process, and 3) loss due to spoilage using the FIFOmethod.

E. Prepare the journal entries to record 1) and 3) above.Reconcile these journal entries with beginning work in process toensure that ending work in process matches 2).

F. Assume instead that inspection takes place when units are 40percent complete. How does this change the number of units spoiled?How does this change the number of units that were abnormalspoilage v. normal spoilage?