Multiple Choice
Beginning work in process consists of 7,000 units, 55% complete. 50,000 units were started and ending work in process is 5,000 units, 25% complete. Normal spoilage is equal to 10% of the units inspected. The inspection point occurs at the 20% point and 7,000 units were rejected. Direct materials are added at the 50% point, direct labour at 30% and overhead is applied uniformly. The costs per equivalent unit are: direct material $1.00; direct labour $1.50; overhead $2.00.
The cost of abnormal spoilage is:
A) $800
B) $1,400
C) $1,800
D) $4,000
Correct Answer:
Verified
Correct Answer:
Verified
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