Answer the Following Questions Using the Information Below:
Verer Custom

question 40

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

• A) $5,890; $9,133
• B) $1,440; $4,800
• C) $4,800; $2,640
• D) $10,560; $2,640

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Definitions:

Flexible Approach

A method or strategy that is adaptable and can be adjusted according to changes in circumstance or new information.

Multidimensional Thinking

Multidimensional thinking is the ability to consider and integrate multiple perspectives and dimensions (such as logical, emotional, and creative) in the problem-solving process.

Effective Solutions

Practical and successful resolutions or answers to problems that meet the needs and objectives of a situation or challenge.

Short and Long Run

Distinct time frames in economics and business planning, where "short run" involves immediate operations and "long run" focuses on future strategy and structural changes.