Narver Company Uses the Weighted-Average Method in Its Process Costing

question 98

Multiple Choice

Narver Company uses the weighted-average method in its process costing system.Conversion costs are added equally throughout the production process.Operating data for the Lubricating Department for the month of October appear below:
$\begin{array}{|l|r|r|}\hline&\text { Units}&\text { Percentage complete }\\\hline \text { Beginning work in process } &6,600 & 60 \% \\\text { inventory } & \\\hline \begin{array}{l}\text { Transferred in from the } \\\text { prior department during }\end{array} & 40,100 & \\\text { January }\\\hline \begin{array}{l}\text { Completed and transferred } \\\text { to the next department } \\\text { during January }\end{array} &37,100 & \\\hline \begin{array}{l}\text { Ending work in process } \\\text { inventory }\end{array} & 9,600 & 80 \% \\\hline\end{array}$

What were the equivalent units of production for conversion costs in the Lubricating Department for October?

• A) 43,100 units.
• B) 37,100 units.
• C) 44,780 units.
• D) 47,780 units.

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Definitions:

Substitute Capital

Assets or investments that can be used as alternatives to others, capable of fulfilling similar functions or bringing similar returns in a portfolio.

Price of Capital

The cost of using capital goods in production, which can include interest payments on loans or rent on equipment.

Marginal Product

The additional output gained by adding one more unit of a specific input, keeping all other inputs constant.

Economic Profit

The profit from an activity or business venture after subtracting both explicit and implicit costs, including opportunity costs.