Use the Following Data from a Company Using a Process

question 58

Multiple Choice

Use the following data from a company using a process costing system to answer the question below. Beginning Work in Process Inventory on June 1 :
1,000 units - 100 percent complete as to direct materials 80 percent complete as to conversion costs

conversion costs

Units Started During June:
6,400 units

Ending Work in Pracess Inventory on June 30:
1,200 units - 100 percent complete as to direct materials 40 percent complete as to conversion costs
The company uses average process costing method.
Equivalent units for conversion costs during the month totaled

• A) 7,920.
• B) 7,680.
• C) 6,680.
• D) 5,880.

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Definitions:

Preferred Stockholders

Investors who own shares that give them priority for dividend payments and assets in the event of a company's liquidation.

Current-Year Dividends

Dividends that are declared and paid to shareholders from the profits made by the company within the current fiscal year.

Common Stockholders

Common stockholders are individuals or entities that own shares of common stock in a company, granting them rights to vote on corporate matters and receive dividends.

Authorized Shares

The maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.