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Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final
Universal Automotive Group is a maker of engines for high performance cars and uses a process costing system. The following information pertains to the final department of manufacturing for Universal's most popular engine, the "Atomic 8". Beginning work-in-process (40% completed) Transferred-in Normal spoilage Abnormal spoilage Good units transferred out Ending work-in-process (25% completed) Conversion costs in beginning inventory Current conversion costs 344 units 1,560 units 80 units 80 units 1,360 units 384 units $176,500 $679,980 Universal Automotive Group calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of the Atomic 8 that are spoiled are the result of defects not discovered before inspection of finished units. Using the weighted-average method, answer the following question: What are the total conversion costs of abnormal spoilage? Multiple Choice Multiple Choice $42,400. $39,288. $37,565. $35,987
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