Use the Information Below to Answer the Following Questions

question 32

Multiple Choice

Use the information below to answer the following questions:
Goody Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The company uses the weighted-average method for process costing. Data for the finishing department follows:

-At the Goody Company the cost per equivalent unit for conversion costs would be closest to

• A) $4.80.
• B) $4.42.
• C) $4.95.
• D) $5.13.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or service delivery, such as raw materials and labor costs.

Fixed Costs

Costs that do not vary with the level of production or sales volume, remaining constant even as production levels change.

Break-even Point

The point at which total costs equal total revenue, resulting in no net loss or gain for the business.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.