The Davidson Company Uses a Weighted Average Process Costing System

question 121

Multiple Choice

The Davidson Company uses a weighted average process costing system. The following information was reported for the Assembly Process for January. Materials are added at the beginning of the process and are 100%. $$\begin{array} { | l | r | r | } \hline \text { Units: } & { \text { units } } & \begin{array} { c } \% \text { complete for } \\\text { conversions }\end{array} \\\hline \text { work in process, } 1 / 1 & 60,000 & 15 \% \\\hline \text { started } & 105,000 & \\\hline \text { work in process, } 1 / 31 & 40,000 & 20 \% \\\hline \\\hline \text { Costs: } & & \\\hline & \text { Materials } & \text { Conversion } \\\hline \text { beginning work in process } & \$ 16,500 & \$ 33,250 \\\hline \text { current costs } & \$ 643,500 & \$ 332,500 \\\hline\end{array}$$ What is the cost assigned to the units completed and transferred to finishing?

• A)$843,750
• B)$708,750
• C)$777,500
• D)$976,000
• E)none of the above

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Definitions:

Equity Accounting

A method of accounting whereby an investor records its investment in an associate company at initial cost and subsequently adjusts the carrying amount for its share of the earnings and losses of the associate.

Reporting Entities

Organizations or entities that are required to prepare financial statements to provide information to external users such as investors, creditors, and regulatory agencies.