Covington Corporation Uses a Process-Cost Accounting System

question 87

Multiple Choice

Covington Corporation uses a process-cost accounting system. The company adds direct materials at the start of its production process; conversion cost, on the other hand, 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, 40%; conversion cost, 40%.
• B) Materials, 40%; conversion cost, 100%.
• C) Materials, 100%; conversion cost, 40%.
• D) Materials, 100%; conversion cost, 60%.
• E) Materials, 100%; conversion cost, 100%.

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