Capitol Construction Company Made a Basket Purchase of Three Items

question 107

Multiple Choice

Capitol Construction Company made a basket purchase of three items.Item X was appraised at $35,000;item Y was appraised at $55,000 and item Z was appraised at $60,000.The purchase price was $125,000.The amount at which item Z should be recorded (rounded to the nearest dollar) is:

• A)$72,000.
• B)$83,300.
• C)$50,000.
• D)$29,167.

Calculate equivalent units for direct materials, direct labor, and overhead.

Compute total and equivalent unit costs for completed and in-process goods.

Describe the flow of overhead, materials, and labor costs in a process cost accounting system.

Explain the use of hybrid costing systems and their applicability.

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Definitions:

Price Index

A statistical measure that shows changes in the price level of a basket of consumer goods and services over time, used to gauge inflation or deflation.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle, but accounts for changes in inventory value due to inflation by measuring inventory in dollar amounts rather than units.

Year-End Price

The market price of a stock or any other security on the last trading day of the year.

Price Index

A measure that examines the average change in prices of goods and services over time in an economy.