Universal Automotive Group Is a Maker of Engines for High

question 79

Multiple Choice

Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final department of manufacturing for Universal's most popular engine, the "Atomic 8". $\begin{array}{lr}\text { Beginning work-in-process ( } 40 \% \text { completed) } & 400 \text { units } \\\text { Transferred-in } & 1,600 \text { units } \\\text { Normal spoilage } & 100 \text { units } \\\text { Abnormal spoilage } & 100 \text { units } \\\text { Good units transferred out } & 1,400 \text { units } \\\text { Ending work-in-process }(25 \% \text { completed) } & 400 \text { units }\\\text { Conversion costs in beginning inventory } & \$ 180,500 \\\text { Current conversion costs } & \$ 728,218\end{array}$ Universal Automotive Group calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of the Atomic 8 that are spoiled are the result of defects not discovered before inspection of finished units. Using the weighted-average method, answer the following question:
What are the total conversion costs transferred to finished goods?

• A) $801,810.
• B) $855,720.
• C) $921,340.
• D) $910,000.

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Definitions:

Normal Model

Another term for the normal distribution, highlighting its role as a foundational model in statistics for randomized data.

Policies

Formal guidelines or principles that govern actions and decisions within organizations or systems.

Independent

A term used to describe two or more events that have no influence on each other's outcomes, or variables that do not show dependence.

Random Variable

A variable linked to the numerical results derived from unpredictable events.