Ashley Corporation Uses a Process-Cost Accounting System

question 64

Multiple Choice

Ashley Corporation uses a process-cost accounting system. The company adds direct materials and direct labor at the start of its production process; overhead cost is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?

• A) Materials, 100%; labor, 100%; overhead cost, 40%.
• B) Materials, 100%; labor, 100%; overhead cost, 100%.
• C) Materials, 100%; labor 40%; overhead cost, 40%.
• D) Materials, 40%; labor, 40%; overhead cost, 60%.
• E) Materials, 40%; labor, 40%; overhead cost, 100%.

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Definitions:

Enforce

To compel observance of or compliance with a law, rule, or obligation.

Verbal Agreement

A contract made orally rather than in writing, which can still be legally binding under certain conditions.

Restrict Competition

Legal or business strategies implemented to limit competition within a market, often scrutinized for fairness under competition law.

Void

Refers to a contract or legal agreement that lacks validity and is therefore unenforceable by law.