The Taylor Company Uses a Process Costing System Equivalent Units for Direct Materials Are
A) 180,000

question 50

Multiple Choice

The Taylor Company uses a process costing system.Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process.The company uses the average costing method.The following data are available for one of its accounting periods: $\begin{array}{lr}&\text { Units }\\\text { Beginning work in process } & 26,000& \text { (70 percent complete for } \\&&\text { conversion costs) } \\\text { Units started } & 180,000 \\\text { Units transferred out } & 191,000 \\\text { Ending work in process } & 15,000 &\text { (60 percent complete for } \\&& \text { conversion costs) }\end{array}$

Equivalent units for direct materials are

• A) 180,000.
• B) 206,000.
• C) 176,000.
• D) 191,000.

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Definitions:

Potential Output

The upper limit of real GDP sustainable over an extended period without inflating the inflation rate.

Phillips Curve

A graphical representation showing an inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Unemployment Rate

The percentage of the employment pool that is not working but is actively on the lookout for a job opportunity.

Inflation Rate

The rise in the overall cost of goods and services across an economy during a certain timeframe, expressed as a percentage.