Sparky Corporation Uses the Weighted-Average Method of Process Costing

question 84

Multiple Choice

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units:
Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000. Costs incurred in February - Conversion: $599,150.
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Calculate the cost per equivalent unit of materials.

• A) $1.74
• B) $2.05
• C) $2.36
• D) $2.00
• E) $2.61

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Definitions:

Rate of Return

The increase or decrease in the value of an investment during a set timeframe, represented as a percent of the investment's original price.

Equivalent Value

The worth of an item, service, or amount in terms of another, often used in comparisons or exchanges.

Compounded Semi-annually

The process where interest is added to the principal sum of an investment or loan twice a year, resulting in interest earning interest.

Third Payment

This refers to the third installment of a series of payments toward a financial obligation.