All material is added at the beginning of the process.

Costs Material Conversion Total

Beginning inventory $ 30,000 $ 3,600 $ 33,600

Current period 885,120 335,088 1,220,208
Total costs $915,120 $338,688 $1,253,808

UNITS

Beginning inventory (30% complete—conversion) 6,000 units

Started 180,000 units
Completed 152,000 units
Ending inventory (70% complete—conversion) 20,000 units
Normal spoilage 4,800 units

Required: Find ending WIP inventory, abnormal loss, and COGM. Assume that, for
conversion costs, abnormal shrinkage is 60 percent.

Materials Conversion Cost

Units Completed 152,000 152,000
Ending WIP 20,000 14,000
Abnormal Loss 9,200 5,520
Equivalent Production - WA 181,200 171,520

W.A

Material 915,120 = 5.05 Conversion Cost 338,688 = 1.97

181,200 171,520

Ending WIP

Material 20,000 x 5.05 = 101,000

CC 14,000 x 1.97 = 27,580
128,580

Abnormal Spoilage

Material 9,200 x 5.05 = 46,460

CC 5,520 x 1.97 = 10,874
57,334

COGM

1,253,808 – 128,580 – 57,334 = 1,067,894