Answer the Following Questions Using the Information Below

question 70

Multiple Choice

Answer the following questions using the information below:
Cartwright Custom Carpentry manufactures chairs in its Processing Department. 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 as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20X5 are as follows:
Costs:

-What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing?

• A)$5,890.64; $9,133.20
• B)$5,890.64; $5,826.00
• C)$6,469.64; $7,690.36
• D)$9,133.20; $5,026.80

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Definitions:

Smoot-Hawley

Refers to the Smoot-Hawley Tariff Act of 1930, a U.S. law that raised import tariffs on thousands of goods, contributing to the severity of the Great Depression.

International Trade

The exchange of goods, services, and capital across international borders or territories.

Tariffs

Taxes imposed on imported goods to increase their cost, typically used to protect domestic industries or earn revenue for the government.

Money Supply

The aggregate value of all money assets within an economy at a given time.