The Following Unit Data Were Assembled for the Heating Process

question 27

Multiple Choice

The following unit data were assembled for the heating process of Morgan Processing,Inc.,for the month of August.Direct materials are added at the beginning of the process.Conversion costs are added uniformly over the production process.The company uses the FIFO process costing method. $\begin{array}{lr}&\text { Units }\\\text { Beginning work in process inventory }\\\text { (30 percent complete) } & 5,000 \\\text { Units started in August } & 44,000 \\\text { Ending work in process } & \\\text { (60 percent complete) } & 4,500\end{array}$

The number of equivalent units produced with respect to conversion costs is

• A) 43,700.
• B) 45,700.
• C) 48,200.
• D) 50,200.

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Definitions:

Operating Cycle

The duration of time from the acquisition of goods for inventory to the sale of the goods and the collection of payment.

Inventory Turnover

A measure of how quickly a company sells and replaces its stock of goods during a certain period, indicating efficiency in managing inventory.

Receivables Turnover

A measure of a company's efficiency in collecting its sales on credit, calculated by dividing sales by average accounts receivable.

Payables Turnover

A financial ratio that measures how quickly a company pays its suppliers by comparing net credit purchases with the average accounts payable over a period.