Question : MULTIPLE CHOICE. Choose the one alternative that best completes the statement : 1196136

 

MULTIPLE CHOICE.

Choose the one alternative that best completes the statement or answers the question. 21)

Units of production that can be reprocessed and then be sold as finished goods are best known as 21)

______ A)

scrap. B)

work-in-process. C)

normal spoilage. D)

abnormal spoilage. E)

reworked units.

22)

Items with minimal sales value are known as 22)

______ A)

reworked units. B)

abnormal spoilage. C)

ending work in process units. D)

scrap. E)

spoilage.

23)

The costs from Abnormal Spoilage should appear 23)

______ A)

either on the balance sheet as part of finished goods inventory, or as a separate inventory item. B)

on the balance sheet as part of finished goods inventory. C)

as a detailed item on the income statement. D)

as part of cost of goods manufactured. E)

as a separate inventory item.

24)

Companies that attempt to achieve zero defects in the manufacturing process treat all spoilage as which of the following? 24)

______ A)

normal spoilage B)

abnormal spoilage C)

scrap D)

production costs added to inventory E)

reworked units

25)

Normal spoilage rates for a manufacturing process should be computed as which of the following? 25)

______ A)

using total good units B)

using total production units C)

using total reworked units D)

using total actual units E)

using total actual units minus total reworked units

26)

Spoilage that should not arise under efficient operating conditions is referred to as 26)

______ A)

normal spoilage. B)

ordinary spoilage. C)

abnormal spoilage. D)

uncontrollable E)

There is no special term for this type of spoilage.

27)

Costs of normal spoilage are usually accounted for as 27)

______ A)

an asset in the balance sheet. B)

part of the cost of goods manufactured. C)

part of the cost of goods sold. D)

a separate line item in the income statement.

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. Spoilage is not detected until the process is complete.

28)

What are the respective direct material costs per equivalent unit assuming spoiled units are recognized and that they are ignored? 28)

______ A)

$25.00; $30.00 B)

$15.00; $20.00 C)

$30.00; $35.00 D)

$20.00; $25.00 E)

$35.00; $40.00

29)

What is the direct material cost assigned to good units completed when spoilage units are recognized? 29)

______ A)

$77,000 B)

$150,000 C)

$112,500 D)

$120,000 E)

$90,000

30)

What is the cost transferred out assuming spoilage units are ignored? 30)

______ A)

$82,500 B)

$120,000 C)

$90,000 D)

$112,500