Answer the Following Questions Using the Information Below:
Outose Concept

question 128

Multiple Choice

Answer the following questions using the information below:
Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 4% of the good units. Data for December 2015 are as follows:
$\begin{array}{ll}\text { WIP, beginuing inventory } 12 / 1 / 2015&22,000 \text { units }\\\text { Direct materials ( } 100 \% \text { complete) }\\\text { Conversion costs ( } 75 \% \text { complete) }\\\text { Started during December } & 76,000 \text { units } \\\text { Completed and transferred out } 12 / 31 / 2015 & 72,000 \text { units } \\\text { WIP, ending inventory } 12 / 31 / 2015 & 18,000 \text { units }\\\text { Direct materials ( } 100 \% \text { complete) }\\\text { Conversion costs ( } 65 \% \text { complete) }\\\\\text { Costs for December: }\\\text { WIP, beginuning Inventory: }\\\text { Direct materials } & \$ 150,000 \\\text { Conversion costs } & 76,800 \\\text { Direct materials added } & 222,400 \\\text { Conversion costs added } & 290,000\end{array}$
-What is the total cost per equivalent unit using the weighted-average method of process costing?

• A) $3.80
• B) $3.60
• C) $7.80
• D) $4.00

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Definitions:

Extraction Costs

The expenses associated with the process of removing raw materials from the earth for use in production or consumption.

Fishery Collapse

A rapid decline in a fishery’s population because its fish are being harvested faster than they can reproduce.

Harvesting Rates

The speed at which natural resources are extracted or harvested, impacting sustainability and future availability.

Reproduction

The biological process by which new individual organisms are produced.