Question : 21) Material left over when making a product referred to : 1186110

 

21) Material left over when making a product is referred to as

A) reworked units.

B) spoilage.

C) scrap.

D) defective units.

E) indirect material.

 

Use the information below to answer the following question(s).

 

Waldorf Computer Systems, Inc. manufactures computer memory cards, and uses process-costing. All direct materials are added at the inception of the production process. The accounting department noted that there was no beginning inventory for January. Direct Materials purchases totalled $150,000 during the month. Work in process records revealed that 7,500 cards were started in January, 4,500 cards were complete, and 1,500 units were spoiled as expected. Ending work in process units are complete in respect to direct materials costs. Inspection occurs at the end of the process.

 

22) What are the respective direct material costs per equivalent unit assuming spoiled units are recognized and that they are ignored?

A) $15.00; $20.00

B) $20.00; $25.00

C) $25.00; $30.00

D) $30.00; $35.00

E) $35.00; $40.00

23) What is the direct material cost assigned to good units completed when spoilage units are recognized?

A) $150,000

B) $120,000

C) $112,500

D) $90,000

E) $77,000

 

24) What is the cost transferred out assuming spoilage units are ignored?

A) $120,000

B) $112,500

C) $90,000

D) $82,500

E) $37,500

 

25) What amounts are allocated to ending work-in-process inventory assuming spoilage units are recognized, and that they are ignored, respectively?

A) $27,500; $30,000

B) $30,000; $34,250

C) $30,000; $37,500

D) $37,500; $40,000

E) $30,000; $40,000

 

26) Spoilage costs allocated to completed units 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 $4,250

D) when spoiled units are ignored by $7,500

E) when spoiled units are recognized by $7,500

 

Use the information below to answer the following question(s).

 

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 non-detectable materials defects. Inspection occurs at the end of the process. Spoiled units generally constitute 5 percent of the good units. Data for December are as follows:

 

WIP, Beginning inventory Dec 1

10,000 units

   Direct materials: 100% complete

 

   Conversion costs: 75% complete

 

 

 

Started during December

40,000 units

 

 

Completed and Transferred Out during month

38,400 units

 

 

WIP, Ending inventory December 31

8,000 units

Direct materials: 100% complete

 

Conversion costs: 65% complete

 

 

 

Costs:

 

WIP, Beginning Inventory:

 

   Direct materials

$50,000

   Conversion costs

30,000

Direct materials added during December

100,000

Conversion costs added during December

140,000

 

27) What is the number of total spoiled units?

A) 1,600 units

B) 2,000 units

C) 2,700 units

D) 3,600 units

E) 4,500 units

 

28) Normal spoilage totalled

A) 1,600 units.

B) 2,000 units.

C) 2,700 units.

D) 1,920 units.

E) 1,700 units.

 

29) Abnormal spoilage totalled

A) 1,600 units.

B) 2,000 units.

C) 1,680 units.

D) 1,920 units.

E) 1,700 units.

30) Distinguish among spoilage, reworked units, and scrap. Give an example of each.