Tres Dieci Ltd Employs a Process Costing System in Which

question 140

Multiple Choice

Tres Dieci Ltd employs a process costing system in which direct materials are added at the beginning of the process. Direct material costs from the prior period for beginning work in process are $6,000. The current period's direct material costs total $60,000. The company began the period with 500 units, 60% complete, started 10,500 units, and finished the period with 1,000 units, 50% complete. Using the weighted average method, the direct material cost per equivalent unit for the period is:

• A) $6.00
• B) $5.71
• C) $6.60
• D) $5.46

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Definitions:

Shares Outstanding

The total number of a company's shares that are currently owned by all its shareholders, including those held by institutional investors and restricted shares held by company’s insiders.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall value of one's holdings remains the same.

Shareholder Wealth

The total value of a shareholder's equity in a company, taking into account the current market value of shares owned.

Trading Range

A price range in which stocks are thought to appeal to the widest variety of investors. Typically between $30 and $100. Stock splits function to keep prices within a trading range when the stock is appreciating.