During July,the Production Department of a Process Operations System Completed

question 24

Multiple Choice

During July,the production department of a process operations system completed and transferred to finished goods 10,000 units that were in process at the beginning of July and 76,000 that were started and completed in July.July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor.At the end of July,15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor.The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450,750 during July.Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

• A)$1.72.
• B)$5.60.
• C)$0.84.
• D)$5.02.
• E)$5.85.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by summing the present values of all cash inflows and outflows associated with the investment.

Tax Credit

A direct reduction of the tax liability, not merely a reduction of taxable income.

Variable Cost

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production inputs, which vary with the level of output.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the amount of goods or services produced, such as rent or salaries.