Use the information below to answer the following question(s).Cartwright Custom Carpentry manufactures chairs in its Processing Department, and uses the FIFO cost flow assumption.Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit.Conversion costs are incurred evenly throughout the production cycle.Inspection takes place at the end of the process, and spoiled units generally constitute 3 percent of the good output.Information provided for March is as follows:

-What are the normal and abnormal spoilage units, respectively, for March?
A)2,580 units; 1,420 units
B)1,950 units; 1,390 units
C)1,690 units; 1,050 units
D)1,420 units; 2,580 units
E)1,140 units; 1,140 units

Question

Use the information below to answer the following question(s).Cartwright Custom Carpentry manufactures chairs in its Processing Department, and uses the FIFO cost flow assumption.Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit.Conversion costs are incurred evenly throughout the production cycle.Inspection takes place at the end of the process, and spoiled units generally constitute 3 percent of the good output.Information provided for March is as follows:
 
-What are the normal and abnormal spoilage units, respectively, for March?
A)2,580 units; 1,420 units 
B)1,950 units; 1,390 units 
C)1,690 units; 1,050 units 
D)1,420 units; 2,580 units 
E)1,140 units; 1,140 units

Quizplus · Accepted Answer

Normal spoilage is 10% of the 25,800 units started in production, or 2,580 units. Abnormal spoilage is 5% of the 25,800 units started in production, or 1,420 units.

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