LDR Manufacturing Produces a Pesticide Chemical and Uses Process Costing

question 123

Multiple Choice

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process.
At the end of the month, LDR calculated equivalent units. The ending inventory in the Mixing Department was 60% complete with respect to conversion costs.
-With respect to direct materials costs, how many equivalent units were calculated for the product that was completed, and how many equivalent units were calculated for the ending balance?

• A) 32,000 equivalent units and 4,800 equivalent units
• B) 32,000 equivalent units and 8,000 equivalent units
• C) 19,200 equivalent units and 4,800 equivalent units
• D) 40,000 equivalent units, and 8,000 equivalent units

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Definitions:

Price Elasticity Of Supply

The percentage change in quantity supplied, divided by the percentage change in the price that caused the change in quantity supplied.

Immobile Factor

Refers to a factor of production that cannot easily be moved from one place to another, such as land or a fixed installation.

Supply Of Resource

The total amount of a commodity, product, or service available for use, sale, or distribution.

Oil

A fossil fuel used primarily for energy production and as a raw material in the manufacture of plastics and other important chemicals.