Gholson Ltd Employs a Process Costing System in Which Direct

question 63

Multiple Choice

Gholson Ltd employs a process costing system in which direct materials are added at the beginning of the process. Direct material costs from the prior period for beginning work in process are $1,250. The current period's direct material costs total $31,500. The company began the period with 500 units, 70% complete, started 10,500 units, and finished the period with 1,000 units, 40% complete. Using a FIFO system, the direct material cost per equivalent unit is

• A) $3.00
• B) $2.98
• C) $3.20
• D) $2.55

Realize the importance of a business plan's elements in securing financing.

Acknowledge the advantages and disadvantages of home-based businesses.

Grasp the criteria for small-business designation and related benefits.

Recognize the support role of the Small Business Administration (SBA) and Small Business Investment Companies (SBICs) in assisting small businesses.

---

Definitions:

Credit Memo

A document issued by a seller to a buyer, reducing the amount the buyer owes to the seller under the terms of an existing invoice, often due to a return or a rebate.

Bank Reconciliation

The process of matching and comparing the account balance according to the bank statement with the balance recorded in the company’s own accounting records to identify discrepancies.

Risk Assessment

The process of identifying, analyzing, and evaluating the levels of risk facing an entity, project, or investment.

Bank Reconciliation

is the process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement, to ensure records are consistent.