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Question 7 The Skate Board Company uses a process cost system for making skateboard wheels. Materials are added at the beginning of the process and conversion costs are uniformly incurred. The company uses the weighted-average method for process costing and all spoiled units are detected at the end of the process. For the month of August, 2021, total units completed was 20,400 of which, 4,080 were considered normal spoilage and 4,320 were considered abnormal. a) Calculate the equivalent units for direct materials and conversion. . (2 marks) The shaded areas are the amounts required to answer the question in Moodle. Flow of Production Equivalent Units Direct Conversion Materials Costs Physical Units 1,600 20.000 21.600 12,000 12,000 12,000 Work in process, beginning Started during current period To account for Good units completed and transferred out Normal spoilage Abnormal spoilage Work in process, ending Accounted for Equivalent units 4,080 4.320 1.200 21,600 1.200 720 LI spoilage, and ii) ending work-in-process inventory. oui, il) abnormal The shaded areas are the amounts required to answer the question in Moodle. Assignment of Costs Total Production Costs $8,032 $80.320 S88,352 Direct Materials $4,000 $40.000 S44,000 21,600 $2.04 Conversion Costs $4,032 $40.320 $44.352 21,120 $2.10 Work-in-process, beginning Costs added during current month Total costs to account for Divide by equivalent units Cost per equivalent unit Assion Costs Good units completed and transferred out Normal spoilage Completed and transferred out Abnormal spoilage Ending Work in Process Total Accounted for Ignore rounding errors $49,680 $24.480 $25,200 S88.416 S44,064 $44,352

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