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, 52,000 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 number of units reworked was:
A) 3,000
B) 2,000
C) 8,000
D) 10,000

Question

Quizplus · Accepted Answer

The number of units reworked is calculated based on the 2% normal rework rate of the units passing inspection. Since 62,000 units were inspected, 2% of 62,000 is 1,240 units. However, none of the options match this calculation directly. The closest option given is 2,000 units, suggesting a possible misunderstanding in the question's details or a simplification for the purpose of the options provided.