The Costs of Normal Spoilage Are Allocated to the Units

question 149

Multiple Choice

The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units if the units ________.

• A) in ending inventory have not passed the inspection point
• B) in ending work-in-process inventory have passed the inspection point
• C) in ending work in process inventory are more than 25% complete
• D) in ending work-in-process inventory are less than 25% complete

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Definitions:

Marginal Benefit

Marginal Benefit refers to the additional satisfaction or utility that a person receives from consuming an extra unit of a good or service.

Marginal Cost

Marginal cost describes the increase in total cost that arises from producing one more unit of a particular good or service.

Economic Perspective

A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions.

Productive Resources

Inputs used in the production of goods and services, including labor, capital, and natural resources.