Physical Units Accounted for Are 160,000

question 118

Multiple Choice

Physical units accounted for are 160,000.Total conversion costs are $276,500.There are 4,000 units in ending inventory which are 50% complete as to conversion costs.How much is the conversion cost per unit?

• A)$1.75.
• B)$1.73.
• C)$1.71.
• D)$1.69.

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Definitions:

Equity Method

A financial accounting approach for recording investments in associated companies by reflecting the owner's share of the investee's profit or loss within the investor's financial statements.

Partial Equity Method

An accounting method used for investments where the investor has significant influence, recording income based on the proportion of earnings rather than dividends received.

Investment Account

An account held at a financial institution and managed by an investment dealer that contains securities for investment purposes.

Goodwill

Goodwill represents the excess of the purchase price over the fair market value of the net identifiable assets acquired in a business combination. It is an intangible asset associated with the purchase of one company by another.