Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to undetectable defects. Spoiled fillets generally constitute 4% of the good fillets. Data for April 2017 are as follows:

Abnormal spoilage totals ________.
A) 8440 units
B) 0 units
C) 7560 units
D) 16,000 units

Question

Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to undetectable defects. Spoiled fillets generally constitute 4% of the good fillets. Data for April 2017 are as follows:

Abnormal spoilage totals ________.

Abnormal spoilage totals ________.
A) 8440 units 
B) 0 units 
C) 7560 units 
D) 16,000 units

Quizplus · Accepted Answer

Spoiled units =88,000 + 140,000 - 189,000 - 23,000 = 16,000 units
Normal spoilage = 4% × 189,000 units = 7560 spoiled units
Abnormal spoilage = 16,000 units - 7560 units = 8440 units

Fish Fillet Incorporated Obtains Fish and Then Processes Them into Frozen