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.

Grasp the importance of the time value of money in the context of capital budgeting.

Know how to compute the present value of an annuity and the present value of a single sum.

Evaluate different investment projects using net present value criteria.

Determine the internal rate of return for an investment.

---

Definitions:

Market Segmentation

Market segmentation is the process of dividing a market into distinct groups of buyers based on different needs, characteristics, or behaviors, who might require separate products or marketing strategies.

Return on Investment

A measure of the profitability of an investment, calculated by dividing the net profit by the initial cost.

Market Segmentation

The practice of dividing a target market into smaller, more defined categories based on certain characteristics like needs, interests, or demographics.

Market-Product Grid

A framework to relate the market segments of potential buyers to products offered or potential marketing actions.