Verer Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at theinception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurredevenly throughout the production cycle. Inspection takes place when units are fully processed. After inspection,some units are spoiled due to undetectable material defects. Spoiled units generally constitute 4% of the goodunits. Data provided for March 2017 are as follows:WIP, beginning inventory 3/1/2017Direct materials (100% complete)Conversion costs (90% complete)Started during MarchCompleted and transferred outWIP, ending inventory 3/31/2017Direct materials (100% complete)Conversion costs (70% complete)Costs:WIP, beginning inventory:Direct materialsConversion costsDirect materials added iConversion costs added32,500 units70,500 units80,100 units18.300 units$71.00040,000105,700128,160 What are the normal and abnormal spoilage units, respectively, for March when using FIFO?O1968 units: 1420 unitsO3204 units: 1396 unitsO530 units: 2032 unitsO9749 units: 1540 units

FIFO Method is described as a First-in first-out method where the materials which are purchased…

Answered: What are the normal and abnormal…

What are the normal and abnormal spoilage units, respectively, for March when using FIFO? O 1968 units: 1420 units O3204 units: 1396 units O530 units: 2032 units O9749 units: 1540 units

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Verer Custom Carpentry manufactures chairs in its Processing Department. 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 when units are fully processed. After inspection,
some units are spoiled due to undetectable material defects. Spoiled units generally constitute 4% of the good
units. Data provided for March 2017 are as follows:
WIP, beginning inventory 3/1/2017
Direct materials (100% complete)
Conversion costs (90% complete)
Started during March
Completed and transferred out
WIP, ending inventory 3/31/2017
Direct materials (100% complete)
Conversion costs (70% complete)
Costs:
WIP, beginning inventory:
Direct materials
Conversion costs
Direct materials added i
Conversion costs added
32,500 units
70,500 units
80,100 units
18.300 units
$71.000
40,000
105,700
128,160

What are the normal and abnormal spoilage units, respectively, for March when using FIFO?
O1968 units: 1420 units
O3204 units: 1396 units
O530 units: 2032 units
O9749 units: 1540 units

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