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1.Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation...

1.Outose 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 undetectable materials defects. Spoiled units generally constitute 4% of the good units. Data for December 2017 are as follows:

WIP, beginning inventory 12/1/2017 22,000 units

Direct materials (100% complete) Conversion costs (70% complete)

Started during December 76,200 units

Completed and transferred out 12/31/2017 72,700 units

WIP, ending inventory 12/31/2017 18,700 units

Direct materials (100% complete)

Conversion costs (60% complete)

Costs for December:

WIP, beginning Inventory:

Direct materials $153,000

Conversion costs 77,100

Direct materials added 224,400

Conversion costs added 294,000

Normal spoilage totals ________.

A.6800 units

B.2908 units

C.3892 units

D.3180 units

0 0
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Answer #1

Normal spoilage totals ________.

A.6800 units

Working:

Calculate total spoiled units
Total spoiled units = Beginning WIP+Unit started-Unit Completed-Ending WIP
=22000+76200-72700-18700
Total spoiled units = 6800 Units
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