Question : 41) Cartwright Custom Carpentry manufactures chairs in its Processing Department, and : 1196138

 

41)

Cartwright Custom Carpentry manufactures chairs in its Processing Department, and uses the FIFO cost flow assumption. Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection some units are spoiled due to non-detectable materials defects. Spoiled units generally constitute 3 percent of the good units. Data provided for March 20×1 is as follows:

 

WIP, Beginning inventory 3/1/20×130,000 units

 

Direct materials: 100% complete

 

Conversion costs: 89.5% complete

 

Started during November80,000 units

 

Completed & Transferred Out86,000 units

 

WIP, Ending inventory 3/31/20×120,000 units

 

Direct materials: 100% complete

 

Conversion costs: 75% complete

 

Costs:

WIP, Beginning Inventory:

 

Direct materials$70,000

 

Conversion costs40,000

Direct materials added160,000

Conversion costs added120,000

 

What are the normal and abnormal spoilage units, respectively, for March?

41)

______ A)

1,690 units; 1,050 units B)

1,140 units; 1,140 units C)

2,580 units; 1,420 units D)

1,420 units; 2,000 units E)

1,950 units; 1,390 units

42)

Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection some units are spoiled due to non-detectable materials defects. Spoiled units generally constitute 3 percent of the good units. Data provided for March 20×1 is as follows:

 

WIP, Beginning inventory 3/1/20×130,000 units

 

Direct materials: 100% complete

 

Conversion costs: 89.5% complete

 

Started during November80,000 units

 

Completed & Transferred Out86,000 units

 

WIP, Ending inventory 3/31/20×120,000 units

 

Direct materials: 100% complete

 

Conversion costs: 75% complete

 

Costs:

WIP, Beginning Inventory:

 

Direct materials$70,000

 

Conversion costs40,000

Direct materials added160,000

Conversion costs added120,000

 

What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing? 42)

______ A)

$5,890.64; $9,133.20 B)

$7,690.36; $5,026.80 C)

$5,890.64; $5,826.00 D)

$6,469.64; $7,690.36 E)

$9,133.20; $5,026.80

43)

Cartwright Custom Carpentry manufactures chairs in its Processing Department, and uses a FIFO cost flow assumption. Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection some units are spoiled due to non-detectable materials defects. Spoiled units generally constitute 3 percent of the good units. Data provided for March 20×1 is as follows:

 

WIP, Beginning inventory 3/1/20×130,000 units

 

Direct materials: 100% complete

 

Conversion costs: 89.5% complete

 

Started during November80,000 units

 

Completed & Transferred Out86,000 units

 

WIP, Ending inventory 3/31/20×120,000 units

 

Direct materials: 100% complete

 

Conversion costs: 75% complete

 

Costs:

WIP, Beginning Inventory:

 

Direct materials$70,000

 

Conversion costs40,000

Direct materials added160,000

Conversion costs added120,000

 

What costs are allocated to the ending work in process inventory for direct materials and conversion costs, respectively? 43)

______ A)

$39,500; $13,600 B)

$28,250; $24,850 C)

$30,000; $21,590 D)

$40,000; $23,100 E)

$30,000; $23,100

44)

Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection some units are spoiled due to non-detectable materials defects. Spoiled units generally constitute 3 percent of the good units. Data provided for March 20×1 is as follows:

 

WIP, Beginning inventory 3/1/20×130,000 units

 

Direct materials: 100% complete

 

Conversion costs: 89.5% complete

 

Started during November80,000 units

 

Completed & Transferred Out86,000 units

 

WIP, Ending inventory 3/31/20×120,000 units

 

Direct materials: 100% complete

 

Conversion costs: 75% complete

 

Costs:

WIP, Beginning Inventory:

 

Direct materials$70,000

 

Conversion costs40,000

Direct materials added160,000

Conversion costs added120,000

 

Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing? 44)

______ A)

Finished Goods$311,500.00

Work in Process$311,500.00 B)

Finished Goods$ 10,560.28

Loss from Spoilage$ 10,560.28 C)

Finished Goods $401,700.00

Work in Process$401,700.00 D)

Loss from Spoilage$ 5,026.80

Finished Goods$ 5,026.80 E)

Finished Goods$327,251.00

Work in Process$327,251.00

45)

If normal spoilage is presumed to occur prior to a specific inspection point, and abnormal spoilage is detected at other inspection points, 45)

______ A)

unit cost of abnormal spoilage will be the same as unit costs of normal spoilage. B)

normal spoilage costs may be allocated prior to inspection of the products and abnormal spoilage will be allocated after the inspection of the products. C)

abnormal spoilage will generally be less than normal spoilage. D)

all spoilage will be recognized proportionately across the various inspection points. E)

unit costs of abnormal spoilage will differ from the unit cost of normal spoilage.

46)

Deducting the disposal value from the costs of the spoiled goods accumulated to the point of inspection equals 46)

______ A)

the net cost of disposals. B)

the net cost of scrap. C)

the net cost of spoilage. D)

the net cost of discarded goods. E)

the net cost of reworked goods.

47)

Study exhibit 18-3, panel B. Note that Step 3 lists the $21,000 of costs in opening work-in-process, and then adds $165,600 which includes $76,500 of direct material costs to reach the total of $186,600. Step 5 also starts with the $21,000 for opening work-in- process, but adds zero for direct materials. This is because 47)

______ A)

the direct materials costs are accounted for already in Step 3, and direct materials is set to zero so that spoilage can isolated in the current period. B)

Step 5 refers to an operation which has no direct materials costs. C)

no direct materials were incurred in this operation for units in opening work-in-process. D)

the direct materials costs are accounted for already in Step 3. E)

direct materials is set to zero so that spoilage can isolated in the current period.

48)

Costs of spoilage include all of the following EXCEPT 48)

______ A)

lost contribution margin. B)

storage. C)

the contribution margin gained on rework. D)

the opportunity cost of the plant and workers. E)

all costs incurred to make the spoiled product to date.

49)

If the inspection point occurs at 33% into the production cycle, which of the following units would be allocated costs of spoilage detected at inspection? 49)

______ A)

units that are under 33% complete B)

all units in the system C)

units that are more than 33% complete D)

units detected to be spoiled units E)

units that are under 33% complete, and units detected to be spoiled units

50)

Which of the following accounts is credited in process-costing, to recognize the cost of normal spoilage transferred-in? 50)

______ A)

there is no such entry made B)

work-in-process C)

manufacturing overhead D)

loss from spoilage E)

finished goods

51)

Which of the following can be used in accounting for spoilage?