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Question Nrew Company manufactures furniture in two departments: molding and finishing. It uses a ...

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Accounting

Question
Nrew Company manufactures furniture in two departments: molding and finishing. It uses a
process-costing system. For March, the company had the following activities for the finishing
department:
Total costs added during the period
Direct materials are placed into production when production is 90% complete. Conversion costs
are added evenly during the production process. Normal spoilage is 10% of all good units.
Spoiled units are disposed of at zero net disposal value.
Required:
Prepare a production cost worksheet under (a) Weighted average method and (b) FIFO
method, given the following 3 independent cases. Show your calculations for number of
units for normal spoilage and abnormal spoilage.
a. assuming inspection point is at 80% stage of production
b. assuming inspection point is at 20% stage of production
c. assuming inspection point is at 100% stage of production
Which method, weighted average or FIFO do you suggest the company use? Why?
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