Garcia Company Uses the Weighted Average Method in Its Costing

question 38

Multiple Choice

Garcia Company uses the weighted average method in its costing system. For the month of May in the Assembly Department, the equivalent units for conversion costs amounted to 35,000. There were 5,000 units in beginning work-in-process that were 50% complete. During the month, 33,000 units were started and 31,400 were completed and transferred. The ending work in process consists of

• A) 5,000 units.
• B) 7,000 units.
• C) 3,600 units.
• D) 6,600 units.

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional shares.

Directors

Individuals elected by shareholders to manage a corporation's affairs and make key strategic decisions on their behalf.

Stock Dividends

These are dividends paid by a company to its shareholders in the form of additional shares of stock, rather than in cash.

Contributed Capital

Funds raised by a company through the issuance of shares to investors, representing the stockholders' equity apart from retained earnings.