A Company Uses a Process Costing System

question 131

Multiple Choice

A company uses a process costing system. Its Welding Department completed and transferred out 100,000 units during the current period. The ending inventory in the Welding Department consists of 30,000 units (75% complete with respect to direct materials and 40% complete with respect to conversion costs) . Determine the equivalent units of production for the Welding Department for direct materials and conversion costs assuming the weighted average method.

• A) 107,500 materials; 118,000 conversion.
• B) 130,000 materials; 130,000 conversion.
• C) 112,500 materials; 130,000 conversion.
• D) 130,000 materials; 112,000 conversion.
• E) 122,500 materials; 112,000 conversion.

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Definitions:

International Transactions

Cross-border exchanges between entities involving goods, services, or financial assets, which affect a country's economic activity.

Revenues

The complete earnings obtained from transactions involving goods or services central to an organization's primary business.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest in the business.

Business Activities

Various actions that are undertaken by a company in order to run its daily operations, including production, sales, and marketing activities.