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Version B 15. In Chang Industries' most recent production run, 7,500 units of product that cost $180 each to produce did not pass inspection. The

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Version B 15. In Chang Industries' most recent production run, 7,500 units of product that cost $180 each to produce did not pass inspection. The units can be sold as scrap for $235 per unit. The production manager reports that the defects can be repaired for $120 each, enabling them to sell the units at their regular market price of $330 per unit. Chang should... A) Repair the defects and sell at the regular market price because the increase to income is $85 per unit greater than selling the units as scrap. B) Repair the defects and sell at the regular market price because the increase to income is $25 per unit greater than selling the units as scrap. C) Sell the defective units as scrap because the increase to income is $25 per unit greater than the option to rework. D) Sell the defective units as scrap because the increase to income is $95 per unit greater than the option to rework. 16. When a job order manufacturer has just completed production on a unit of inventory that is now ready to be sold, what is the appropriate journal entry to transfer the cost of the completed job? A) Debit Work in Process Inventory, credit Finished Goods Inventory B) Debit Finished Goods Inventory; credit Work in Process Inventory C) Debit Cost of Goods Sold; credit Finished Goods Inventory D) Debit Cost of Goods Sold; credit Work in Process Inventory 17. Piper Ltd's comparative balance sheet reports a Merchandise Inventory balance of $73,400 on December 31, 2019 and a balance of $81,410 on December 31, 2020. When preparing the 2020 Statement of Cash flows, how should the Merchandise Inventory account balance change be reflected in the operating section (using the indirect method)? A) Add $8,010 to net income. B) Subtract/deduct $8,010 from net income. C) Disclose the change in a non-cash note disclosure. D) The change in the Merchandise Inventory account balance should not be reported in the operating section of the Statement of Cash Flows. Page 5

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