1. The packaging machine in a cookie manufacturing company broke down in the mid
ID: 2525057 • Letter: 1
Question
1. The packaging machine in a cookie manufacturing company broke down in the middle of a shift. No one noticed the problem for 30 minutes. An entire batch of cookies (representing 25% of the day’s production of chocolate chip cookies) was ruined. This would most likely be considered
A. Normal spoilage
B. Abnormal spoilage
C. Manufacturing Overhead
2. At the end of March, the company had 2,000 units in ending inventory. Another 5,000 units were started in April. 4,000 units were completed and transferred out. There were 2,700 in ending inventory. If the normal spoilage rate is 2%, how many defective units should the company expect?
A. 300
B. 140
C. 100
D. 80
Explanation / Answer
1.It is considered as abnormal spoilage as it can be avoided if the working staff were alert. Further it is over and above normal spoilage.
2.Units started in march 5000
rate of normal spoilage is 2%
normal spoilage is 5000*0.02=100
therefore the company may expect 100 defective units
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