Using Conversion Cost Per Equivalent Unit Is Appropriate for Many

question 21

Multiple Choice

Using conversion cost per equivalent unit is appropriate for many businesses that use process costing because:

• A) All manufacturing costs are entered into the production process in the same period.
• B) Direct labor and factory overhead enter the production process at the same rate.
• C) Equivalent cost per unit is not sufficient measurement of production activity.
• D) The weighted average method of calculating equivalent units requires it.
• E) Direct materials and direct labor are usually entered into the production process at the same rate.

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Definitions:

Cystic Duct

A duct connecting the gallbladder to the common bile duct, facilitating the flow of bile into and out of the gallbladder.

Common Bile Duct

A tube that carries bile from the liver and gallbladder into the duodenum, part of the small intestine.

Pancreatic Duct

A tube in the pancreas through which pancreatic juices flow into the small intestine.

Pancreatic Juice

A digestive fluid secreted by the pancreas containing enzymes that assist in the digestion of proteins, fats, and carbohydrates.