In a Particular Department, 5,000 Units Were Started and All

question 211

Multiple Choice

In a particular department, 5,000 units were started and all but 600 were completed at the end of the period. These 600 were 70% complete for materials and 45% for conversion costs. Costs added were $52,300 for materials and $53,500 for conversion costs. What is the total number of equivalent units for conversion costs assuming that the weighted-average method is used?

• A) 5,270
• B) 4,670
• C) 4,800
• D) 5,000

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Definitions:

Direct Materials

Materials that can be directly linked to the production of a product and represent a substantial portion of the cost.

Accounting Rate of Return

A financial metric used to assess the profitability of an investment, calculated as the average annual profit divided by the initial investment cost.

Annual Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues over a year.

Payback Period

The amount of time it takes for an investment to generate enough cash flow to recover its initial cost.