If Unexpected Turnover in Year 2 Caused Fields to Estimate

question 86

Multiple Choice

If unexpected turnover in Year 2 caused Fields to estimate that 15% of the options would be forfeited,what amount of compensation expense should Fields recognize in Year 2?

• A)$0
• B)$210,000
• C)$300,000
• D)$600,000

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Definitions:

Work In Process

Items or inventory that are partially completed in the manufacturing process, not yet ready for sale.

Conversion Costs

The total expenses of direct labor plus the manufacturing overheads used in transforming raw materials into completed products.

Equivalent Units

A measure used in process costing that represents the incomplete work in a production process as a certain number of fully completed units.

Cost Reconciliation

The process of analyzing and adjusting the differences between the reported cost and the actual cost to ensure accuracy in financial records.