Question:

In July, the Assembly department of Mercury Manufacturing began the month with 1,200 units in work-in-process inventory (75%). Through the month, 14,000 units were transferred in, with costs of $114,000 attached to them from the Molding department. In this month, 15,000 units were completed, 8oo of which were spoiled. Spoilage is usually 5% of good output. Ending work-in-process was 30% complete. In the Assembly department, all direct materials are added when the product is 50% complete, and conversion costs are applied consistently throughout the process. The value of starting work-in-process inventory was $18,880.00 ($7,600.00 in costs transferred from Molding, $3,750.00 in direct materials costs, and $7,530.00 in conversion costs). During July, $15,000 in direct materials costs and $33,885.00 in conversion costs were incurred in the Assembly department.

(1). Consider Mercury Manufacturing uses the Weighted Average technique of process costing, evaluate the value of units completed and transferred out, ending work-in-process inventory, and the loss due to abnormal spoilage for the Assembly department.

(2). Consider Mercury Manufacturing uses the FIFO technique of process costing, evaluate the value of units completed and transferred out, ending work-in-process inventory, and the loss due to abnormal spoilage for the Assembly department.