Answer the Following Questions Using the Information Below:
Verer Custom

question 23

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:
$\begin{array}{ll}(\text { WIP, beginuing inventory } 3 / 1 / 20 \times 5&32,000 \text { units }\\\text { Direct materials ( } 100 \% \text { complete) }\\\text { Conversion costs ( } 85 \% \text { complete) }\\\\\text { Started during March } & 70,000 \text { units } \\\text { Completed and transferred out } & 80,000 \text { units } \\\\\text { WIP, ending inwentory } 3 / 31 / 20 \times 5 & 18,000 \text { units }\\\text { Direct materials ( } 100 \% \text { complete) }\\\text { Conversion costs ( } 80 \% \text { complete) }\\\\\text { Costs: }\\\text { WIP, beginning inventory: }\\\hline \text { Direct materials } & \$ 70,000 \\\quad \text { Conversion costs } & 40,000 \\\text { Direct materials added } & 105,000 \\\text { Conversion costs added } & 128,160\end{array}$
-What are the normal and abnormal spoilage units,respectively,for March when using FIFO?

• A) 3,200 units; 800 units
• B) 1,950 units; 1,390 units
• C) 3,690 units; 1,850 units
• D) 1,420 units; 2,000 units

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Definitions:

Groupthink

Groupthink refers to a psychological phenomenon where the desire for harmony and conformity within a group results in an irrational or dysfunctional decision-making outcome.

Nominal Group

A technique used in group decision-making that involves individuals generating ideas independently before sharing and discussing them collectively.

Illusion Of Agreement

The false perception that consensus has been achieved in a group when, in reality, members may not fully understand or support the decision.

Mediator

An impartial individual who facilitates dialogue between conflicting parties to help them reach a mutual agreement.