HayD Company has the data attached in the table below. Units in departments 1&2 are inspected when the production process reaches 70% of the conversion cost. Meanwhile, 90% of the material has been given to spoiled units. There is no salvage value for spoiled units. Spoiled units are accounted for in both departments’ production cost reports. Spoilage fees are charged to Manufacturing Overhead.
Questions :
a. Prepare production cost reports for department 1: Assembly and department 2: Finishing using the FIFO method. Use two decimal places.
b. Prepare journal entries to record the use of materials, labor, overhead, finished goods, and spoilage in departments 1 and 2 assuming labor wages have not been paid and overheads still have to be paid.
c. Calculate the unit cost of the production.
