Direct Disk Drive Company Operates a Computer Disk Manufacturing Plant $\quad\quad 150,000$

question 35

Multiple Choice

Direct Disk Drive Company operates a computer disk manufacturing plant.Direct materials are added at the end of the process.The following data were for August 20X5: Work in process, beginuing inventory $\quad\quad 150,000$ units
Transferred-in costs ( $100 \%$ complete)
Direct materials ( $0 \%$ complete)
Conversion costs ( $90 \%$ complete)

$\begin{array}{ll}\text { Transferred in during current period } & 450,000 \text { units } \\\text { Completed and transferred out } & 400,000 \text { units }\end{array}$

Work in process, ending inventory $\quad\quad\quad\quad 200,000$ units
Transferred-in costs ( $100 \%$ complete)
Direct materials ( $0 \%$ complete)
Conversion costs ( $65 \%$ complete)

Calculate equivalent units for conversion costs using the FIFO method.

• A) 401,500 units
• B) 350,000 units
• C) 300,000 units
• D) 395,000 units

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Definitions:

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of borrowing and the real yield to investors.

Nominal Rate

The interest rate before adjustments for inflation, representing the face value of financial transactions.

Rate of Inflation

The measure of the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Net Present Value

The present value of cash flows minus the present value of cash outlays, used in capital budgeting to assess the profitability of an investment or project.