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Accounting

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The data, in physical units, that describe a grinding process for January are in the accompanying table. Inspection occurs at the 100% completion stage. Normal spoilage is 3% of the good units passing inspection. (Click the icon to view the data for January.) Required 1. Compute the normal and abnormal spoilage in units. 2. Assume that the equivalent-unit cost of a spoiled unit is $24. Compute the amount of potential savings if all spoilage were eliminated, assuming that all other costs would be unaffected. Comment on the results. Requirement 1. Compute the normal and abnormal spoilage in units. Total spoiled units Normal spoilage units Abnormal spoilage units \begin{tabular}{lr} Work in process, beginning & 18,700 \\ Started during current period & 232,233 \\ \cline { 2 } To account for & 250,933 \\ Spoiled units & 12,500 \\ Good units completed and transferred & \\ out & 213,333 \\ Work in process, ending & 25,100 \\ \hline Accounted for & 250,933 \\ \hline \hline \end{tabular}

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