In a Particular Department, 8200 Units Were Started and All

question 71

Multiple Choice

In a particular department, 8200 units were started and all but 1300 were completed at the end of the period. These 1300 were 80% complete for materials and 30% for conversion costs. Costs added were $55,400 for materials and $52,100 for conversion costs. What is the total number of equivalent units for conversion costs?

• A)8200
• B)7940
• C)8590
• D)7290

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Definitions:

Actual Costs

The real expenses incurred in manufacturing a product, providing a service, or running a business, as opposed to estimated or budgeted costs.

Standard Costs

Pre-determined or estimated costs used for cost control and decision-making purposes, often as a benchmark for measuring performance.

Direct Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, used in budgeting and cost management.

Actual Costs

The expenses that a company has truly incurred as opposed to estimated or budgeted amounts.