Steelworx Ltd accumulates costs for its single product using weighted average process costing. Direct material is added at the beginning of the production process, and conversion occurs uniformly throughout the process. All spoilage is detected at the quality inspection point, which occurs after production is 25 per cent complete. A partially completed production report for the month of April follows:
1. Prepare a schedule of equivalent units for Steelworx.
2. Calculate the costs per equivalent unit.
3. Calculate the cost of goods completed and transferred out during April.
4. Calculate the cost of spoiled units during April.
5. Calculate the cost remaining in the work in process inventory on 30 April.
6. Prepare a journal entry to record the transfer of the cost of goods completed and transferred out during April, assuming:
(a) Spoiled units represent normal spoilage.
(b) Spoiled units represent abnormal spoilage.
7. Wow would the production report above be different if the company used FIFO process costing?