The Cost Per Equivalent Unit Using the Weighted Average Method

question 37

Multiple Choice

The cost per equivalent unit using the weighted average method is calculated as

• A)Total costs to account for/Equivalent units.
• B)Costs added during the period/Equivalent units.
• C)Total costs to account for/Number of partially completed units.
• D)Costs added during the period/Number of partially completed units.

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Definitions:

Fixed Manufacturing Overhead

The sum of all consistent, non-variable costs associated with manufacturing, including salaries of supervisors and rent of the facility.

Job-Order Costing System

An accounting method that tracks the costs associated with producing a specific batch of products or a specific job.

Predetermined Overhead Rate

The rate used to allocate manufacturing overhead to products, calculated before the period begins based on estimated costs and activity levels.

Direct Labor-Hours

A measure used in accounting to allocate costs, referring to the total hours worked by employees directly involved in the manufacturing process.