James Automotive Group Is a Maker of Engines for High

question 61

Multiple Choice

James 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 James' outstanding engine called "Superior-1".
James 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 "Superior-1" that are spoiled are the result of defects not discovered before inspection of finished units.Using the weighted-average method,what are the total conversion costs of abnormal spoilage?

• A)$45,000.
• B)$53,636.
• C)$90,000.
• D)$180,500. 100 x $450 = $45,000

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Definitions:

Share-Based Remuneration

Compensation provided to employees or other parties in the form of equity shares in the company, often used to align the interests of the employees with those of the shareholders.

Dividend Pay-Out

The portion of a company's earnings distributed to its shareholders as dividends.

Market Efficiency

A financial market theory suggesting that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Insider Trading

The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.