A Company That Uses Process Costing Has 1,000 Units in Ending

question 68

Multiple Choice

A company that uses process costing has 1,000 units in ending Work in Process Inventory that are 100% complete with respect to materials and 80% complete with respect to conversion costs. The cost per unit for inventory is $2.15 for materials and $1.65 for conversion costs. What is the cost assigned to the ending Work in Process inventory?

• A) $3,470
• B) $3,800
• C) $3,040
• D) $2,150

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Definitions:

Madison Corporation Bonds

Debt securities issued by Madison Corporation to raise capital, promising to pay back with interest.

Accrued Interest

Interest that has accrued but remains unpaid.

Bonds Purchased

An investment in debt securities issued by corporations or governments, representing a portion of the borrowing and entitling the holder to interest payments.

Equity Method

An accounting technique used to record investments in other companies, where the investment is significant but not controlling, typically 20-50% ownership.