Gholson Ltd Employs a Process Costing System in Which Direct

question 49

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 the weighted average method, the direct material cost per equivalent unit for the period is

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

---

Definitions:

Annual Payments

Recurring payments made once a year.

Compounded Monthly

Determining interest on a monthly schedule by including both the initial principal and previously earned interest in the calculation.

Mortgage

A loan secured by real property, typically a residential property, where the borrower is obliged to pay back with a predetermined set of payments.

Loan Balance

The amount of money that remains to be paid back on a loan at any given time, excluding future interest.