Beginning Work in Process Consists of 7,000 Units, 55% Complete

question 102

Multiple Choice

Beginning work in process consists of 7,000 units, 55% complete. 50,000 units were started and ending work in process is 5,000 units, 25% complete. Normal spoilage is equal to 10% of the units inspected. The inspection point occurs at the 20% point and 7,000 units were rejected. Direct materials are added at the 50% point, direct labour at 30% and overhead is applied uniformly. The costs per equivalent unit are: direct material $1.00; direct labour $1.50; overhead $2.00.
The cost of abnormal spoilage is:

• A) $800
• B) $1,400
• C) $1,800
• D) $4,000

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Definitions:

Inelastic Demand

Characterizes a situation where the quantity demanded of a good or service changes very little in response to changes in price.

Price Elasticity of Demand

A measure of the sensitivity of quantity demanded to a change in price, indicating how a product's demand responds to price changes.

Golf Courses

Facilities equipped with a series of holes, landscapes, and obstacles designed for the game of golf, where individuals can play rounds of golf.

Movie Theaters

Places where films are shown publicly for entertainment, typically featuring large screens and a ticket-based entry.