Realm Company Uses Process Costing and Had an Equivalent Cost

question 11

Multiple Choice

Realm Company uses process costing and had an equivalent cost of $2.30 per unit for direct materials and $1.80 per unit for conversion costs during May in its Rolling Department. There were 11,600 units completed and transferred to Finished Goods, and 1,000 units in ending Work in Process inventory that were 80% complete with respect to direct material and 60% complete with respect to conversion costs. How much is the cost of completed goods transferred to Finished Goods from the Rolling Department?

• A) $2,920
• B) $47,560
• C) $50,480
• D) $53,360

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Definitions:

Income

The monetary payment received for goods or services, or from other sources, as rents or investments.

Real Output

Measures the quantity of goods and services produced, adjusted for inflation, to reflect the actual physical output.

Diminishing Returns

Diminishing returns is an economic principle stating that as more investments or resources are added to a production process, the incremental gain in output will eventually decrease if all other factors remain constant.

Disguised Unemployment

Situations where more people are employed in a task or job than is necessary for its completion, leading to inefficiency.