Sparky Corporation Uses the Weighted-Average Method of Process Costing

question 173

Multiple Choice

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units:
Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $43,000.
Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000.
Costs incurred in February - Conversion: $599,150.
Calculate the cost per equivalent unit of conversion.

• A) $4.98
• B) $4.60
• C) $5.45
• D) $4.50
• E) $4.16

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Definitions:

Weekly Salaries

A compensation structure where employees are paid a set amount on a weekly basis, regardless of the hours worked.

Adjusting Entry

A journal entry made at the end of the accounting period to allocate income and expenditure to the correct period.

Accounting Period

denotes the specific period of time covered by financial statements, typically a year or a quarter.

Liability Insurance

Insurance that provides protection against claims resulting from injuries and damage to people and/or property.