A Company Uses the Weighted Average Method for Inventory Costing

question 32

Multiple Choice

A company uses the weighted average method for inventory costing. During a period, Department A finished and transferred 50,000 units to Department B. Also, during the period, 10,000 units were started but brought only to a stage of being 3/5 completed. The number of equivalent units produced by Department A during the period was:

• A) 44,000 units.
• B) 50,000 units.
• C) 54,000 units.
• D) 56,000 units.
• E) 60,000 units.

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Definitions:

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered but not yet paid for.

Inventory Turnover

A financial metric measuring the rate at which a company sells and replaces its stock of goods during a given period.

Cost of Goods Sold

Represents the direct costs attributable to the production of goods sold by a company, including materials and labor.

Return on Equity

A measure of a corporation’s profitability that reveals how much profit a company generates with the money shareholders have invested.