Kendra Corporation Uses a Process-Cost Accounting System

question 22

Multiple Choice

Kendra 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:

Marginal Income Tax Rate

The rate at which the last dollar of a taxpayer’s income is taxed, indicating the percentage of an additional dollar of income that will be paid in taxes.

Tax Schedule

A chart or table that displays tax rates applied to various income levels, dictating how much tax is owed based on income.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount on which the tax is levied.

Marginal Tax Rate

The percentage at which the next dollar earned of taxable income is subjected to tax.