Goody Company Adds Direct Materials at the Beginning of the Process

question 17

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 direct materials?

• A)57,000
• B)60,000
• C)51,000
• D)54,000

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Definitions:

Marginal Rate

The rate at which a certain quantity changes as another quantity, typically the input, is incrementally adjusted.

Demand Pattern

A demand pattern is a trend observed in the way consumer demand for goods or services changes over time.

Second Order

An additional request or transaction following an initial one, often implying a follow-up or repeat business.

Total Order

Total order is the complete quantity of goods or services requested by a customer at a particular time.