Goody Company Adds Direct Materials at the Beginning of the Process

question 30

Multiple Choice

Goody Company adds direct materials at the beginning of the process and adds conversion costs throughout the process.Data for the finishing department follows: $\begin{array}{|l|r|}\hline \text { WIP, Apri 1 } & 12,000 \text { units } \\\hline \text { Transferred-in costs in WIP, April 1 } & \$ 78,940 \\\hline \text { Direct materials (100\%) in WIP, Apri 1 } & \$ 22,420 \\\hline \text { Conversion costs (70\%) in WIP, Apri 1 } & \$ 21,385 \\\hline \text { Units transferred-in } & 45,000 \\\hline \text { Transferred-in costs during April } & \$ 540,900 \\\hline \text { Units completed } & 42,000 \\\hline \text { April direct materials cost } & \$ 157,500 \\\hline \text { April conversion costs } & \$ 230,837 \\\hline \text { WIP, Apri 30 } & 15,000 \text { units } \\\hline \text { (100\% for materials and } 60 \% \text { for conversion } \\\text { costs) }\\\hline\end{array}$

- What are the equivalent units for conversion costs?

• A)52,500
• B)57,000
• C)49,200
• D)51,000

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Definitions:

Costly Mistakes

Costly Mistakes are errors or poor decisions that result in significant financial loss or damage.

Planning

Process of anticipating future events and conditions and determining courses of action for achieving organizational objectives.

Organizational Objectives

Specific, measurable goals set by a business or organization to guide its operations and strategic decisions.

Management

The process of planning, organizing, directing, and controlling the resources of an organization to achieve its goals efficiently and effectively.