Freddie Company Adds Direct Materials at the Beginning of the Process

question 80

Multiple Choice

Freddie Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. Data for the Finishing Department follows: The total number of physical units for which we have to account is

• A)44,000.
• B)63,000.
• C)71,000.
• D)55,000.

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Definitions:

Prior Period Costs

Costs that were incurred in a previous accounting period but are recorded or recognized in the current period's financial statements.

Processing Costing System

An accounting system used to allocate production costs to products or services when they are mass-produced in continuous processes.

Finished Goods Warehouse

A storage area for products that have completed the manufacturing process and are ready to be sold or distributed.

Weighted-Average Method

A cost accounting method that calculates the cost of units produced by averaging the costs of different batches of the units.