What are the normal and abnormal spoilage units, respectively, for March when using FIFO

ACCOUNTING

Multiple Choice

Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:


WIP, beginning inventory 3/1/20x3 30,000 units

Direct materials (100% complete)

Conversion costs (89.5% complete)


Started during March 80,000 units

Completed and transferred out 86,000 units


WIP, ending inventory 3/31/20x3 20,000 units

Direct materials (100% complete)

Conversion costs (75% complete)


Costs:

WIP, beginning inventory:

Direct materials $ 70,000

Conversion costs 40,000

Direct materials added 160,000

Conversion costs added 120,000


What are the normal and abnormal spoilage units, respectively, for March when using FIFO?

a. 2,580 units; 1,420 units

b. 1,950 units; 1,390 units

c. 1,690 units; 1,050 units

d. 1,420 units; 2,000 units

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