Author Question: Outose Concept manufactures small tables in its Processing Department. Direct materials are added at ... (Read 109 times)

tth · **on:** Mar 6, 2021

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:

WIP, beginning inventory 12/1/2017

22,500 units

Direct materials (100% complete)
Conversion costs (75% complete)

Started during December

76,700 units

Completed and transferred out 12/31/2017

72,300 units

WIP, ending inventory 12/31/2017

18,400 units

Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:

Direct materials

$159,000

Conversion costs

77,800

Direct materials added

232,400

Conversion costs added

293,000

What is the number of total spoiled units?
◦ 10,435 units
◦ 4338 units
◦ 4162 units
◦ 8500 units

Bison · **Reply #1 on:** Mar 6, 2021

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