(Appendix 4A) Owens Corporation Uses a Process Costing System

question 96

Multiple Choice

(Appendix 4A) Owens Corporation uses a process costing system. For March, the beginning work in process inventory consisted of 60,000 units that were 60% complete with respect to processing. The ending work in process inventory for the month consisted of units that were 20% complete with respect to processing. A summary of unit and cost data for the month follows:

-Assuming that Owens Corporation uses the FIFO method,which of the following is closest to the cost per equivalent unit for processing cost for March?

• A) $3.23
• B) $3.98
• C) $4.02
• D) $4.22

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Definitions:

Production Levels

The quantity of goods or services produced by a company during a specific period, influenced by demand, capacity, and resource availability.

Responsibility Centre

A unit within an organization under the management's control, accountable for specific activities and associated costs, revenues, or investments.

Investment Centre

A business unit or segment which is responsible for its own revenues, expenses, and assets, and whose performance is measured by its return on investment.

Profit Centre

A profit centre is a distinct business unit or department within an organization that is responsible for generating its own revenue and managing its own costs to drive profitability.