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

question 47

Multiple Choice

Use the information below to answer the following question(s) .Craft Concept manufactures small tables in its Processing Department.Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit.Conversion costs are incurred evenly throughout the production cycle.Before inspection, some units are spoiled due to non-detectable materials defects.Inspection occurs at the end of the process.Spoiled units generally constitute 5 percent of the good units.Data for December are as follows:

-Under the FIFO method, all spoilage costs are assumed to be

• A)related to the units in beginning inventory, plus the units completed during the period.
• B)related to the units completed during the period.
• C)related to the units in ending inventory.
• D)related to the units in both beginning and ending inventory plus the units completed during the period.
• E)related to the units completed in both beginning and ending inventory.

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Definitions:

Method

A systematic plan, procedure, or technique used to accomplish a specific task or solve a particular problem.

Method of Agreement

A principle in inductive reasoning that identifies a cause of a phenomenon by finding common factors in different instances where the phenomenon occurs.

Cause

The source or reason something happens, leading to a particular effect or outcome.

Method of Residues

A technique in scientific and logical analysis where elements accounted for by existing explanations are removed to isolate the effect of a single factor.