Ending WIP Inventory Has 100 Units That Are 70% Complete

question 62

Multiple Choice

Ending WIP Inventory has 100 units that are 70% complete for direct materials and 20% complete for conversion costs. For calculating costs per equivalent unit, which of the following statements is true?

• A)The denominator would include 100 units for both.
• B)The denominator would include 70 units for direct materials and 20 for conversion.
• C)The denominator would include 20 units for direct materials and 80 for conversion.
• D)You cannot determine what constitutes the denominator.

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Definitions:

Price Ceiling

A price ceiling is a government-imposed limit on how high the price of a good or service can be charged in the market, usually set below the equilibrium price to ensure affordability of essential goods.

Monopolist

An entity that is the sole provider of a particular good or service, giving it the ability to control market prices and output levels.

Price Ceiling

A legal maximum price that can be charged for a good or service, aiming to prevent prices from rising too high.

Monopolist

An entity with exclusive control over the supply of a particular good or service, setting prices and production levels.