Kelly, Inc

question 10

Multiple Choice

Kelly, Inc. uses a weighted-average process costing system that calculates normal rework as 2% of the units passing inspection. The inspection point is at the 75% point and units failing inspection are returned to the 40% point. During the current period, 50,000 units were started; 62,000 units inspected; and 52,000 units completed. Direct material is added at the 50% point and conversion costs occur uniformly. Beginning work in process was 10,000 units, 55% complete and ending work in process was 8,000 units, 85% complete. Costs per equivalent unit for material were $1.00 and $3.00 for conversion costs. The loss from abnormal rework was:

• A)$3,200
• B)$1,640
• C)$1,120
• D)$4,018

---

Definitions:

Project Management

The application of processes, methods, skills, knowledge, and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters.

Available Resources

Refers to the tools, personnel, time, and other assets that are accessible and can be utilized to achieve project objectives.

Risk Mitigation

Strategies and approaches used to reduce or control the probability and impact of negative events or risks on a project.

Risk Transfer

The strategy of passing financial risk from one party to another, often through the use of insurance or outsourced contracts.