Reference: 04-03 Madsen Company Uses the Weighted-Average Method in Its Process Costing

question 58

Multiple Choice

Reference: 04-03
Madsen Company uses the weighted-average method in its process costing system. During October, the Mixing Department transferred out 40,000 units. The October 31 work in process inventory in the Mixing Department consisted of 4,000 equivalent units of material and 5,000 equivalent units of labour and overhead. The cost per equivalent unit was $2.50 for materials and $6.25 for labour and overhead.
-The "Cost to account for" section of the production report for October will show a total amount equal to

• A)$110,000.
• B)$428,750.
• C)$350,000.
• D)$391,250.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Product Value

The worth of a product perceived by the customer, often influenced by quality, functionality, and brand reputation.

Manufacturing Cycle

The complete process from the procurement of raw materials to the production of finished goods ready for sale.

Distributor/Manufacturer Interface

The point of interaction between manufacturers and distributors, focusing on the exchange of products, information, and payments.