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

---

Definitions:

Work Cell

A layout arrangement in manufacturing designed to improve efficiency by grouping together all necessary resources to complete a product or task.

Staff Demand

The required number of employees needed to meet the operational needs of a business.

Plant Operation

covers the activities involved in the daily running of a manufacturing or industrial facility, including production, maintenance, and ensuring that the plant meets output and quality goals.

Cycle Times

The total time from the beginning to the end of your process, as defined by you and your customer, which could include production and processing time.