Figure 3-11

question 197

Multiple Choice

Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory.
-Refer to Figure 3-11. What would be the estimate of electricity cost if the factory incurred 4,700 labor hours next month?

• A) $9,400
• B) $20,260
• C) $23,140
• D) $19,560

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Definitions:

Weighted-Average Method

A cost accounting method that averages the costs of goods available for sale for the calculation of the cost of goods sold and ending inventory.

Conversion Costs

The combined costs of direct labor and manufacturing overhead expenses required to convert raw materials into finished goods.

Work in Process

Refers to goods that are in various stages of being made within a factory but are not yet completed.

Processing Department

A division within a manufacturing facility where a specific type of production process is carried out, often part of a larger assembly line.