Verer Custom Carpentry Manufactures Chairs in Its Processing Department

question 18

Multiple Choice

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 5% of the good units. Data provided for March 2017 are as follows:

What costs are allocated to the ending work-in-process inventory for direct materials and conversion costs, respectively, using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent.)

• A) $64,676; $40,067
• B) $28,237; $24,740
• C) $28,352; $25,353
• D) $28,019; $15,091

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Definitions:

Adequate Standard

A benchmark or level of quality deemed acceptable or sufficient for its intended purpose, often used in contexts related to living conditions, performance, or regulatory compliance.

Taxes

Mandatory financial charges or levies imposed by a government on its citizens to fund public expenditure and services.

Generalized Reciprocity

A form of exchange that involves giving goods or services with the expectation that their value will be reciprocated at an unspecified future time.

Negative Reciprocity

A mode of exchange in which the aim is to get something for as little as possible. Neither fair nor balanced, it may involve hard bargaining, manipulation, outright cheating, or theft.