Figure 6-7

question 132

Multiple Choice

Figure 6-7. Geller Manufacturing uses a process cost system to manufacture sensors for the security industry.The following information pertains to operations for the month of March.
The beginning inventory was 70 percent complete for materials and 30 percent complete for conversion costs.The ending inventory was 90 percent complete for materials and 50 percent complete for conversion costs.
Costs pertaining to the month of March are as follows:
Beginning inventory costs are: materials,$44,400; conversion cost $30,500.
Costs incurred during March are: materials used,$588,000; conversion cost $624,000.
Refer to Figure 6-7.Using the weighted average method the total equivalent units of production for direct materials is:

• A)120,000
• B)118,600
• C)116,000
• D)105,000

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Definitions:

Opportunity Cost

The value of the best alternative forgone when an item or activity is chosen.

Monetary Costs

Expenses measured in terms of the amount of money expended or required to purchase goods, services, or assets.

Alternative Activities

Options or activities that can be chosen as alternatives to the current activity being engaged in, often considered in the context of opportunity cost.

Comparative Advantage

The ability to make something at a lower opportunity cost than other producers face.