Domingo Corporation Uses the Weighted-Average Method in Its Process Costing

question 183

Multiple Choice

Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were: A total of 6,800 units were started and 6,100 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.The cost per equivalent unit for materials for the month in the first processing department is closest to:

• A) $22.04
• B) $22.81
• C) $23.34
• D) $22.56

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Definitions:

Direct Labor Cost

The total expense for all labor directly involved in the production of goods or services, excluding indirect labor costs like maintenance or supervision.

Estimated Overhead Cost

The anticipated cost of indirect expenses required to manage and operate a business over a specific period.

Actual Overhead

The real costs incurred from indirect expenses such as utilities, rent, and administrative salaries in the production process.

Applied Overhead

An estimate of manufacturing overhead costs allocated to individual units of production.