The Morgan Company Uses the Weighted-Average Method in Its Process

question 33

Multiple Choice

The Morgan Company uses the weighted-average method in its process costing system.For a particular department,the company had 54,000 equivalent units of production with respect to conversion costs in March.There were 7,500 units in the department's beginning work-in-process inventory,two-thirds complete with respect to conversion costs.During March,52,500 units were started and 50,000 were completed and transferred out of the department.What was the ending work-in-process inventory in the department?

• A) Consisted of 5,000 units.
• B) Consisted of 2,500 units.
• C) 65% complete with respect to conversion costs.
• D) 40% complete with respect to conversion costs.

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Definitions:

Manufacturing Overhead

The indirect production costs that are not directly associated with the manufacturing of products, such as utilities and rent for the manufacturing facility.

Predetermined Overhead Rate

A computed rate used for applying overhead costs to products or job orders, calculated before the period begins based on estimated costs.

Machine-Hours

The total hours that machinery is operating during a specific period, often used for allocating manufacturing overhead costs.

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to individual units of production.