[jeangarciarosa2]

Bec question: In english please!, I don’t understand!!!!!!!!!!

A department adds material at the beginning of a process

and identifies defective units when the process is 40%

complete. At the beginning of the period, there was no work

in process. At the end of the period, the number of work in

process units equaled the number of units transferred to finished

goods. If all units in ending work in process were 66

2/3% complete, then ending work in process should be allocated

a. 50~ of all normal defective unit costs.

b. 40% of all normal defective unit costs

c. 50% of the material costs and 40% of the conversion costs of all normal defective unit costs.

d. None of the normal defective unit costs.

[Anonymous]

Whats the correct answer? I believe it should be A. 50% of the defective unit costs. The question is tricky but there is a similar one in Becker with easier numbers. If the DM are added at the beginning of the process than the equivalent units are 100% complete as to DM. The quality inspection that identifies defective units is completed when they are 40% complete. Since they ending WIP and the units transferred to FG are the same (i.e., 50%) than you would allocate the defective units accordingly. Knowing that the ending WIP is 66 2/3% complete would tell you that they have been inspected so you would allocate your defective units proportionately to FG and WIP so 50/50.

Thats what my thoughts are but I'd like to know the correct answer!

[jeangarciarosa2]

@bcjasper09 Thanks, you are my favorite Bec teacher hahahahah.

(A) The requirement is to determine the proper

allocation of norma) defective unit costs to the ending work

in process. Normal defective unit costs are spread over the

units of good output because the attaining of good units

necessitates the appearance of normal spoiled units. The

cost of the normal defective units is included in the total

costs of the good equivalent units of output. Ending inventory

comprised one-half of the total units of good output

produced during the year; therefore: it will bear 50% of the

normal defective unit costs incurred during the year.

[Anonymous]

Awesome! Thanks for the compliment… if it wasn't a compliment I'm taking it as one! I am so nervous for BEC on the 22nd. I am on round three of Becker MCQ's and I”m not quite sure what my plan is after that.

In relation to that, I've seen questions that will ask “what portion of spoilage will be allocated to the current years income” so keep those fundamentals in mind that the normal spoilage becomes an inventoriable cost and the abnormal is expensed immediately. So given circumstances remember to use the portion sold to what is in ending inventory to figure out what hit the P/L this period.

Happy Studies!

[Jennifer241]

If I were you, I would review the 2005, 2006 AICPA released questions…

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Anonymous]

Where are those located? I have the 2013 Becker self study so shouldn't those be included?

[Author]

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