Tong, Inc Is a Manufacturing Company That Uses a Process Costing

question 65

Multiple Choice

Tong, Inc. is a manufacturing company that uses a process costing system. All direct material is added at the start of the process, and spoilage is discovered at the end. During the first period of operations 15,000 units of material were placed into production at a cost of $20 each (ignore conversion costs for this process) . Ending work in process was 2,000 units, good units completed totalled 11,000 units, and normal spoilage is 15% of the units surviving inspection. Inspection takes place after the units are completed.
The unit cost assigned to the abnormal spoilage is:

• A) $-0-
• B) $22.61
• C) $20.00
• D) $24.00

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, or other instruments at a specified price within a specific time period.

September

The ninth month of the year in the Gregorian calendar, often associated with the beginning of the academic year in many countries.

Put Option

An economic agreement granting the possessor the option to offload a defined quantity of an underlying asset at a fixed price before a certain deadline, without any compulsion.