Question
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
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 the 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? Group of answer choices 8,500 units 4,162 units 10,435 units 4,338 units
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