Suppose Smith Started 100,000 Units During the Period, Transfers 75,000

question 6

Multiple Choice

Suppose Smith started 100,000 units during the period, transfers 75,000 units to finished goods and estimates that 25,000 units still in process.Smith has issued all the needed materials, but has completed only 20% of the assembly work.What is the number of total equivalent units in work in process for material and conversion at the end of the period?

• A)100,000 material/25,000 conversion.
• B)25,000 material/5,000 conversion.
• C)25,000 material/25,000 conversion.
• D)75,000 material/75,000 conversion.
• E)100,000 material/100,000 conversion.

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Definitions:

Par Value

The face value of a bond or stock, as stated on the certificate, which is the minimum stated value.

Convertible Debentures

Bonds that can be converted into a predetermined amount of the issuing company's equity at certain times during their life, usually at the discretion of the bondholder.

Conversion Price

The predetermined price at which convertible security, such as a bond or preferred stock, can be converted into a specified number of shares of common stock.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the company’s profits.