Answer the Following Questions Using the Information Below

question 55

Multiple Choice

Answer the following questions using the information below:
Triboro Computer Systems, Inc., manufactures printer circuit cards. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $200,000 during the month. Work-in-process records revealed that 8,000 card units were started in January, 4,000 card units were complete, and 3,000 card units were spoiled as expected. Ending work-in-process card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
-Spoilage costs allocated to ending work in process are larger by which method and by how much?

• A)when spoiled units are recognized, by $5,000
• B)when spoiled units are recognized, by $8,500
• C)when spoiled units are ignored, by $15,000
• D)when spoiled units are recognized, by $15,000

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Definitions:

Special Product Pattern

Formulas that simplify the multiplication of algebraic expressions.

Multiply

The arithmetic operation of scaling one number by another, equivalent to adding a number to itself multiple times.

Simplify

The process of reducing a mathematical expression or equation to its simplest form.

Compounded Annually

Refers to the process of calculating and adding interest to the principal sum of an investment or loan once every year.