Question

Jonquil, Inc., manufactures leather jackets. The total cost per equivalent unit is $22.50. The total number of good units were 8,500 jackets, and the number of spoiled units (all considered as abnormal) were 242 jackets. Compute the cost to be assigned to the spoilage loss account.

Answer 1

The cost assigned to the spoilage loss account for Jonquil, Inc. is $5,445.00, calculated by multiplying 242 spoiled jackets by the cost per unit of $22.50.

Step-by-step explanation:

The cost assigned to the spoilage loss account for Jonquil, Inc. can be calculated by multiplying the number of spoiled units by the total cost per equivalent unit. In this case, there were 242 spoiled jackets, and the total cost per equivalent unit is $22.50. To find the cost attributed to the spoilage, simply compute:

Cost to Spoilage Loss Account = Number of Spoiled Units × Total Cost per Equivalent Unit

Cost to Spoilage Loss Account = 242 units × $22.50/unit

Cost to Spoilage Loss Account = $5,445.00

Therefore, the cost to be assigned to the spoilage loss account for Jonquil, Inc. is $5,445.00.