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##### SPOILAGE, REWORKED UNITS, AND SCRAP questions

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THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 37 THROUGH 41.;Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled \$100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.;37. What are the respective direct material costs per equivalent unit, assuming spoiled units are recognized or ignored?;a. \$20.00, \$35.00;b. \$25.00, \$40.00;c. \$30.00, \$45.00;d. \$35.00, \$50.00;38. What is the direct material cost assigned to good units completed when spoilage units are recognized?;a. \$50,000;b. \$100,000;c. \$80,000;d. \$87,500;39. What is the cost transferred out assuming spoilage units are ignored?;a. \$87,500;b. \$80,000;c. \$50,000;d. \$77,500;40. What are the amounts allocated to the work-in-process ending inventory assuming spoilage units are recognized and ignored, respectively?;a. \$20,000, \$24,500;b. \$30,000, \$34,250;c. \$12,500, \$20,000;d. \$37,500, \$40,000;41. Spoilage costs allocated to ending work in process are larger by which method and by how much?;a. When spoiled units are recognized by \$2,500;b. When spoiled units are recognized by \$4,250;c. When spoiled units are ignored by \$7,500;d. When spoiled units are recognized by \$7,500;THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 42 THROUGH 47.;Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be 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 generally constitute 5% of the good units. Data for December 20x3 are as follows;WIP, beginning inventory 12/1/20x3 10,000 units;Direct materials (100% complete);Conversion costs (75% complete);Started during December 40,000 units;Completed and transferred out 12/31/20x3 38,400 units;WIP, ending inventory 12/31/20x3 8,000 units;Direct materials (100% complete);Conversion costs (65% complete);Costs for December;WIP, beginning Inventory;Direct materials \$ 50,000;Conversion costs 30,000;Direct materials added 100,000;Conversion costs added 140,000;42. What is the number of total spoiled units?;a. 1,600 units;b. 2,000 units;c. 2,700 units;d. 3,600 units;43. Normal spoilage totals;a. 1,600 units.;b. 2,000 units.;c. 1,920 units.;d. 2,700 units;44. Abnormal spoilage totals;a. 1,600 units.;b. 2,000 units.;c. 1,680 units.;d. 1,920 units.;45. What is the total cost per equivalent unit using the weighted-average method of process costing?;a. \$3.00;b. \$3.60;c. \$6.60;d. \$4.60;46. What cost is allocated to abnormal spoilage using the weighted-average process-costing method?;a. \$ 0;b. \$ 7,360;c. \$11,088;d. \$16,400;47. What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?;a. \$18,720, \$24,000;b. \$22,900, \$19,820;c. \$24,000, \$18,720;d. \$28,560, \$14,160;48. The cost per good unit in the weighted-average method is equal to;a. the total cost of direct materials and conversion costs per equivalent unit, plus a share of normal spoilage.;b. the sum of the costs per equivalent unit of direct materials, and conversion costs.;c. the total costs divided by total equivalent units.;d. none of the above.;49. Under the FIFO method, all spoilage costs are assumed to be;a. related to the units in beginning inventory, plus the units completed during the period.;b. related to the units completed during the period.;c. related to the units in ending inventory.;d. related to the units in both beginning and ending inventory plus the units completed during the period.

Paper#24542 | Written in 18-Jul-2015

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