Use the following information for the next 4 questions.
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 labor at 30% and overhead is applied uniformly. The costs per equivalent unit are: direct material $1.00; direct labor $1.50; overhead $2.00.
-The cost of abnormal spoilage is
A) $800
B) $1,400
C) $1,800
D) $4,000

Question

Quizplus · Accepted Answer

Abnormal spoilage = (Units rejected - Normal spoilage) x Cost per unit= (7,000 - 5,000) x $1.00= $2,000

Use the Following Information for the Next 4 Questions