Answer the Following Questions Using the Information Below:
Verer Custom

question 111

Multiple Choice

Answer the following questions using the information below:
Verer 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 4% of the good units. Data provided for March 20X5 are as follows:
$\begin{array}{ll}(\text { WIP, beginuing inventory } 3 / 1 / 20 \times 5&32,000 \text { units }\\\text { Direct materials ( } 100 \% \text { complete) }\\\text { Conversion costs ( } 85 \% \text { complete) }\\\\\text { Started during March } & 70,000 \text { units } \\\text { Completed and transferred out } & 80,000 \text { units } \\\\\text { WIP, ending inwentory } 3 / 31 / 20 \times 5 & 18,000 \text { units }\\\text { Direct materials ( } 100 \% \text { complete) }\\\text { Conversion costs ( } 80 \% \text { complete) }\\\\\text { Costs: }\\\text { WIP, beginning inventory: }\\\hline \text { Direct materials } & \$ 70,000 \\\quad \text { Conversion costs } & 40,000 \\\text { Direct materials added } & 105,000 \\\text { Conversion costs added } & 128,160\end{array}$
-Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing?

• A) \(\begin{array} { l }
• \text {Finished Goods } &10,560.28\\ \text {Loss from Spoilage } &10,560.28\\
• \end{array}\)
• B) \(\begin{array} { l }
• \text {Loss from Spoilage } &2,640.00\\ \text {Finished Goods } &2,640.00\\
• \end{array}\)
• C) \(\begin{array} { l }
• \text {Finished Goods} &287,600.00\\ \text { Work in Process} &287,600.00\\
• \end{array}\)
• D) \(\begin{array} { l }
• \text { Finished Goods} &110,000.00\\ \text { Work in Process} &110,000.00\\
• \end{array}\)

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