Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to undetectable materials defects. Inspection occurs when units are 60% converted. Spoiled units generally constitute 6% of the good units. Data for December 2017 are as follows:

What is the number of total spoiled units?
A) 10,435 units
B) 4338 units
C) 4162 units
D) 8500 units

Question

Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to undetectable materials defects. Inspection occurs when units are 60% converted. Spoiled units generally constitute 6% of the good units. Data for December 2017 are as follows:

What is the number of total spoiled units?

What is the number of total spoiled units?
A) 10,435 units 
B) 4338 units 
C) 4162 units 
D) 8500 units

Quizplus · Accepted Answer

Spoiled units = (22,500 units + 76,700) - (72,300 units + 18,400) = 8500 units

Outose Concept Manufactures Small Tables in Its Processing Department