Ending WIP Inventory Has 100 Units That Are 80% Complete

question 92

Multiple Choice

Ending WIP inventory has 100 units that are 80% complete for direct materials and 30% complete for conversion costs. For calculating weighted-average costs per equivalent unit, which of the following statements is true?

• A) The denominator would include 80 units for direct materials and 30 for conversion.
• B) The denominator would include 100 units for both.
• C) The denominator would include 20 units for direct materials and 70 for conversion.
• D) You cannot determine what constitutes the denominator.

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Definitions:

Par Common Stock

Common stock issued with a nominal or face value, used primarily for accounting purposes and often set at a low amount.

Treasury Stock

Stocks that the issuing company originally sold and then bought back, lowering the total number of shares available for trade on the market.

Fair Market

The price that an asset would sell for on the open market, under all conditions requisite to a fair sale.

Stock Dividend

A form of dividend payment made by a company to its shareholders in the form of additional shares rather than cash.