Use the Information Below to Answer the Following Questions

question 115

Multiple Choice

Use the information below to answer the following questions:
The Adams Company uses a process costing system. During the current period, 1,600 units were started and 1,200 units were completed and transferred out. Ending units were 70% complete for materials and 35% complete for conversion costs. Direct materials costs added were $32,500 and conversion costs added were $31,400. There was no beginning WIP inventory and conversion costs are added evenly throughout the process.
-At the end of the period, the cost per equivalent unit for direct materials for the Adams Company would be closest to

• A) $26.17.
• B) $27.08.
• C) $23.43.
• D) $21.96.

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Definitions:

Chapter 13

A section of the U.S. Bankruptcy Code allowing individuals with a steady income to reorganize their debts and pay them off over time.

Debts

Money, goods, or services owed by one party to another under the terms of a contract or agreement.

Garnishments

A legal process whereby a creditor can collect what a debtor owes by requiring a third party to turn over the debtor’s property or wages.

Creditors

Individuals or institutions that lend money or extend credit and are owed repayment by debtors.