Materials Are Added at the Beginning of a Process in a Process

question 9

Multiple Choice

Materials are added at the beginning of a process in a process costing system.The beginning Work-in-Process Inventory was 30% complete as to conversion costs.Using first-in,first-out (FIFO) process costing,the total equivalent units for material are

• A)beginning inventory this period for this process.
• B)units started this period in this process.
• C)units started this period in this process plus the beginning inventory.
• D)units started this period in this process plus 70% of the beginning inventory this period.

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Definitions:

Cost Of Capital

The average rate of return a company must pay to its long-term creditors and shareholders for the use of their funds.

Discounted Cash Flow

A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money.

Initial Investment

Initial investment refers to the amount of money initially laid out for an investment project or venture.

Profitability Index

The present value of a project’s cash inflows divided by the investment required.