Answer the Following Question(s)using the Information Below

question 13

Multiple Choice

Answer the following question(s) using the information below:
Hawk Ltd.uses process costing in its Fabricating Department.At the beginning of October, it had 12,000 units in beginning work-in-process that were 40% complete with respect to conversion.During October it put 87,000 units into production and completed 89,000 good units.At October 31, there were 3,000 units in ending work-in-process that were 70% complete with respect to conversion.Direct materials are added at the beginning of the process.Inspection occurs at the end of the process and normal spoilage is 6% of good output.Costs related to the beginning inventory were $36,800 for direct materials and $28,600 for conversion costs.During the month, the company issued $280,000 of direct materials and incurred $599,400 of conversion costs.
-What are the normal and abnormal spoilage units, respectively, for October assuming Hawk uses the weighted average method of process costing?

• A)5,340 units; 1,660 units
• B)7,000 units; 1,660 units
• C)5,220 units; 1,780 units
• D)5,340 units; 1,780 units
• E)5,940 units; 1,060 units

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Definitions:

Extraordinary Gain

A gain resulting from events or transactions that are both unusual in nature and infrequent in occurrence, separated from regular business operations.

Fair Market Value

The price at which an asset would sell in the market under conditions where buyers and sellers are acting freely, informed, and without undue pressure.

Book Value

The net value of a company's assets as listed on the balance sheet, calculated as total assets minus intangible assets (like goodwill) and liabilities.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.