Jimbob Co Uses the Weighted-Average Method in Its Process Costing System

question 40

Multiple Choice

Jimbob Co. uses the weighted-average method in its process costing system. The company adds all required materials at the beginning of the process in Department A, which is the first of two stages in its production process. Information concerning operations in the Department A in October follows: $$\begin{array} { | l | l | l | } \hline & \text { Units } & \text { Materials Cost } \\\hline \text { Work in process on October 1 } & 6,000 & \$ 3,000 \\\hline \text { Units started during October } & 50,000 & \$ 25,560 \\\hline \text { Units completed and transferred to } & & \\\hline \text { the next Department during October } & 44,000 & \\\hline\end{array}$$ What were the equivalent units of production in Department A in October?

• A)6,000 units.
• B)44,000 units.
• C)12,000 units.
• D)56,000 units.

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Definitions:

Marginal Utility

The increased contentment or advantage obtained by the consumption of an extra unit of a good or service.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers from participating in the market.

Utility

Utility refers to the total satisfaction received from consuming a good or service.

Diminishing Utility

The principle that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.