Dome Company, Which Uses a Process-Costing System, Began Operations on January

question 7

Multiple Choice

Dome Company, which uses a process-costing system, began operations on January 1 of the current year. The company incurred conversion cost evenly throughout manufacturing. If Dome started work on 3,000 units during the period and these units were 70% of the way through manufacturing, it would be correct to say that the company has:

• A)3,000 physical units in production.
• B)2,100 completed units.
• C)900 in-process units.
• D)900 equivalent units of production.
• E)3,000 equivalent units of production.

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Definitions:

Non-current Asset

An asset that is not expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Promissory Note

A written promise to pay a specified amount of money to a certain entity on demand or at a fixed or determinable future time.

Future Date

A specified day in the future, often related to scheduling events, deadlines, or financial transactions.

Maturity Date

The date on which a debt instrument becomes due and principal and interest payments must be paid.