During July,the Production Department of a Process Operations System Completed

question 24

Multiple Choice

During July,the production department of a process operations system completed and transferred to finished goods 10,000 units that were in process at the beginning of July and 76,000 that were started and completed in July.July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor.At the end of July,15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor.The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450,750 during July.Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

• A)$1.72.
• B)$5.60.
• C)$0.84.
• D)$5.02.
• E)$5.85.

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Definitions:

Collection Delay

The period between when a sale is made and when the payment is actually received.

Lockbox System

A service provided by banks to companies for the collection of payments from customers, enhancing the speed and security of transactions.

Money Market Securities

Short-term financial instruments, such as Treasury bills and commercial paper, offering liquidity and low risk.

Collection Time

is the average number of days it takes for a business to convert its receivables into cash, reflecting the efficiency of its credit policies and collections.