Richards Corporation Uses the Weighted-Average Method of Process Costing

question 213

Multiple Choice

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300.
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Calculate the cost per equivalent unit of materials.

• A) $2.33
• B) $1.89
• C) $2.00
• D) $2.59
• E) $2.20

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Definitions:

Financial Advantage

This term refers to the benefit gained in financial terms, often measured in terms of profit or cost savings.

Dropping Product

The decision to stop manufacturing, selling, or supporting a product, often due to low sales or profitability.

Eliminating Product

The process of discontinuing the production and sale of a product, typically due to poor sales, profitability, or strategic realignment.

Financial Advantage

The benefit gained from making a financially prudent decision that leads to wealth accumulation, cost savings, or any other monetary gain.