Forthefunofit Ltd Uses a Process Costing System

question 56

Multiple Choice

Forthefunofit Ltd uses a process costing system. Direct materials are added at the beginning of the process. During January, Department A had a beginning inventory of 2,000 units, 50% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 40% complete for conversion costs. Using FIFO process costing, the equivalent units for conversion costs for the month were:

• A) 14,400
• B) 15,400
• C) 16,000
• D) 14,100

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Definitions:

Debt Financing

Raising capital through the sale of bonds, loans, or other notes to individuals or institutions.

Return on Assets

A financial ratio indicating how profitable a company is relative to its total assets.

Weighted Average Cost of Capital

An average representing the expected return on all of a company's securities, weighted according to the proportion each contributes to the total capital structure.

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk.