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Verer Custom Carpentry Manufactures Chairs in Its Processing Department

question 61

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Verer 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 undetectable material defects. Spoiled units generally constitute 4% of the good units. Data provided for March 2017 are as follows:
Verer 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 undetectable material defects. Spoiled units generally constitute 4% of the good units. Data provided for March 2017 are as follows:   What are the normal and abnormal spoilage units, respectively, for March when using FIFO? A)  3204 units; 1396 units B)  1968 units; 1420 units C)  9749 units; 1540 units D)  530 units; 2032 units
What are the normal and abnormal spoilage units, respectively, for March when using FIFO?


Definitions:

Work Ethic

The principle that hard work is intrinsically virtuous or worthy of reward.

Job Enrichment

A method of motivating employees by providing them with more variety, autonomy, and responsibility in their roles.

Task Identity

The degree to which a job requires completion of a whole and identifiable piece of work.

Employees' Commitment

The level of enthusiasm and dedication an employee has towards their job and company.

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