ar Points THE FOLLOWING INPORMATION APPLIBS TO QUESTIONS I THROUGH 3. Craft Conc
ID: 2531188 • Letter: A
Question
ar Points THE FOLLOWING INPORMATION APPLIBS TO QUESTIONS I THROUGH 3. Craft Concept maaufactures small tables in its Processing Department. Direct materials are added at the initiation of tho production cycle and must bo bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units constitute 5% ofthe completed god units. Data for December 20x are as follows: WIP, beginning inventory 12/1/20x 0,000 units Direct materials (100% complete) Conversion costs (75% complete) Completed and transferred out 12/31/20x Direct materials (100% complete) Started during December 40,000 umits 38,400 units 8,000 units WIP, ending inventory 12/31/20x Conversion costs (65% complete) Costs for Decomber: WIP, beginning Inventory: $50,000 30,000 100,000 140,000 Direct materials Conversion costs Direct materials added Conversion costs added 1. What is the nimber of total spoiled units? a. 1,600 units b. 2,000 units 2,700 units. d. 3,600 units 2. Normal spoilage totals a 1,600 units. b. 2,000 units. c. 1,920 units. d. 2,700 units Abnormal spoilage totals a. 1,600 units. b. 2,000 units. c. 1,680 units. d. 1,920 units. 3.Explanation / Answer
Answers
A
Beginning Inventory
10000
B
Started during december
40000
C
Completed and transferred out
38400
D=A+B-C
Balance that should have been (of WIP ending)
11600
E
WIP ending actual balance
8000
F=D-E
Total Spoiled Units [Answer 1]
3600 units
A
Completed and transferred out
38400
B = A x 5%
5% Normal Loss
1920 units
A
Total Spoiled Units [Answer 1]
3600
B
Normal Loss units [Answer 2]
1920
C=A-B
Abnormal Loss Units [Answer 3]
1680 units [3600 – 1920]
A
Beginning Inventory
10000
B
Started during december
40000
C
Completed and transferred out
38400
D=A+B-C
Balance that should have been (of WIP ending)
11600
E
WIP ending actual balance
8000
F=D-E
Total Spoiled Units [Answer 1]
3600 units
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