Use the Information Below to Answer the Following Question(s)

question 97

Multiple Choice

Use the information below to answer the following question(s) .Cartwright Custom Carpentry manufactures chairs in its Processing Department, and uses the FIFO cost flow assumption.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 at the end of the process, and spoiled units generally constitute 3 percent of the good output.Information provided for March is as follows:

-What are the costs per equivalent unit for direct materials and conversion respectively?

• A)$2.00; $1.54
• B)$1.45; $1.54
• C)$2.11; $1.62
• D)$2.11; $1.18
• E)$2.00; $1.18

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Definitions:

Amortization

The process of spreading out a loan or intangible asset cost over a specific period of time for accounting and taxation purposes.

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.

Straight-Line Method

A way of calculating equal depreciation expenses for an asset over its useful life.

Total Interest Expense

The sum of all interest payments made on debts over a specified period.