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

question 28

Multiple Choice

Huffer Company uses the weighted-average method in its process costing system.The following information pertains to Processing Department D for the month of May:
$$\begin{array} { | l | r | r | } \hline & \text { Number of units } & \text { Cost of materials } \\\hline \text { Beginnirg work in process } & 30,000 & \$ 11,000 \\\hline \text { Started in May } & 8 0 , 0 0 0 & \$ 36,000 \\\hline \text { Units completed } & 8 5 , 0 0 0 & \\\hline \text { Ending work in process } & 25,000 & \\\hline\end{array}$$
All materials are added at the beginning of the process.Which of the following costs is closest to the cost per equivalent unit for materials?

• A) $0.43.
• B) $0.45.
• C) $0.55.
• D) $0.59.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Permanent Accounts

Balance sheet accounts that carry their ending balances over into the next accounting period, such as assets, liabilities, and equity accounts.

Accumulated Depreciation-Equipment

The total depreciation that has been recorded against a company's equipment since it was put into service.

Depreciation Expense-Equipment

The allocation of an equipment's cost over its expected useful life to reflect its decrease in value over time.