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

question 147

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:

-Total cost per equivalent unit using the weighted-average method equals

• A)the cost per equivalent unit of direct materials plus cost per spoiled unit.
• B)the cost per equivalent unit of conversion costs plus cost per unit of spoiled materials.
• C)the total costs divided by total equivalent units.
• D)the cost per equivalent unit of direct materials plus the cost per equivalent unit of conversion costs.
• E)the cost per equivalent unit of indirect materials plus cost per spoiled unit.

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Definitions:

Accounts Payable

Represents money owed by a company to its creditors for goods and services purchased on credit.

Accounts Receivable

Payments due to a business by its customers for products or services that have been dispatched or exploited, yet are still unpaid.

Interval Measure

A statistical measure that indicates the range within which a population parameter lies with a certain degree of confidence.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the business's normal operating cycle.