Answer the following questions using the information below:
Triboro Computer Systems, Inc., manufactures printer circuit cards. 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 $200,000 during the month. Work-in-process records revealed that 8,000 card units were started in January, 4,000 card units were complete, and 3,000 card units were spoiled as expected. Ending work-in-process card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
1) 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
2) What is the direct material cost assigned to good units completed when spoilage units are recognized?
A) $100,000
B) $200,000
C) $160,000
D) $175,000
3) What is the cost transferred out assuming spoilage units are ignored?
A) $175,000
B) $160,000
C) $100,000
D) $155,000
4) What are the amounts allocated to the work-in-process ending inventory assuming spoilage units are recognized and ignored, respectively?
A) $40,000; $49,000
B) $60,000; $68,500
C) $25,000; $40,000
D) $75,000; $80,000
5) Spoilage costs allocated to ending work in process are larger by which method and by how much?
A) when spoiled units are recognized, by $5,000
B) when spoiled units are recognized, by $8,500
C) when spoiled units are ignored, by $15,000
D) when spoiled units are recognized, by $15,000
Answer the following questions using the information below:
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 2012 are as follows:
WIP, beginning inventory 12/1/201220,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December80,000 units
Completed and transferred out 12/31/201276,800 units
WIP, ending inventory 12/31/201216,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials$ 100,000
Conversion costs60,000
Direct materials added200,000
Conversion costs added280,000
6) What is the number of total spoiled units?
A) 13,200 units
B) 4,000 units
C) 5,400 units
D) 7,200 units
7) Normal spoilage totals:
A) 3,200 units
B) 4,000 units
C) 3,840 units
D) 5,400 units
8) Abnormal spoilage totals:
A) 3,200 units
B) 4,000 units
C) 3,360 units
D) 3,840 units
9) 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
10) What cost is allocated to abnormal spoilage using the weighted-average process-costing method?
A) $ 0
B) $ 14,720
C) $22,176
D) $32,800
A) $37,440; $48,000
B) $45,800; $39,640
C) $48,000; $37,440
D) $57,120; $28,320
Answ
