A Company Uses a Process Costing System

question 92

Multiple Choice

A company uses a process costing system.Its Assembly Department's beginning inventory consisted of 30,000 units,75% complete with respect to direct labor and overhead.The department completed and transferred out 127,500 units this period.The ending inventory consists of 20,000 units that are 25% complete with respect to direct labor and overhead.All direct materials are added at the beginning of the process.The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period.Assuming the weighted average method,the direct labor cost per equivalent unit (rounded to the nearest cent) is:

• A)$0.14.
• B)$0.16.
• C)$0.18.
• D)$0.30.
• E)$0.37.

---

Definitions:

Pricing Strategy

The approach a business takes to setting the price of its products or services, influenced by costs, competition, market demand, and other factors.

Kinked Demand

A market situation where a firm’s demand curve has a distinct bend, reflecting different elasticity above and below the market price.

Highly Concentrated Industry

An industry where a small number of firms hold a large market share, leading to reduced competition.

Ford Motor Company

An American multinational automaker founded by Henry Ford, known for revolutionizing the automobile industry with its assembly line production method.