Color Wheel Has 3,500 Gallons of Paint in WIP Inventory

question 27

Multiple Choice

Color Wheel has 3,500 gallons of paint in WIP inventory, with 75% of materials already added. What are equivalent units in ending WIP inventory for materials if the paint is 60% through the process?

• A)2,100
• B)2,625
• C)0
• D)525

---

Definitions:

Marginal Cost

The additional financial outlay required to produce one more unit of a good or service.

Marginal Cost

The expense incurred by the production of one extra unit of a product or service.

Total Cost

The entirety of expenses incurred during the production process of goods or services, which includes both fixed and variable costs.

Total Variable Cost

The sum of all variable costs (costs that change with the level of output) involved in producing a particular quantity of output.