Duran Manufacturing Uses a Process Costing System and Manufactures Its

question 120

Multiple Choice

Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?

• A) Duran can look for ways to cut the costs when actual process costs are more than planned process costs.
• B) Duran needs to set the selling price to cover the costs of making the product and provide a profit.
• C) Duran can only use the cost per unit of each process if all units are fully completed at the end of the accounting period.
• D) Duran needs to know the ending balances in the following accounts: Work-In-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

---

Definitions:

Note Receivable

A written promise that one party will pay another party a specified sum of money, either on demand or at a set future date.

Interest Due

The amount of interest payment required to be paid on a loan or debt at a specified date.

Maturity Value

The amount that will be received at the maturity date of a financial instrument, typically including the principal and the interest.

Note Receivable

A financial asset representing a written promise to receive a specific amount of money, plus interest, from another party at a future date.