Gibbons Company Uses a Process Costing System and the Weighted

question 38

Multiple Choice

Gibbons Company uses a process costing system and the weighted average method.The company had 400 units of product in its work in process inventory at the beginning of the period.During the period 1,500 additional units of product were started.At the end of the period there were 750 units of product in the Work in Process account.The ending work in process inventory was estimated to be 30% complete.The beginning work in process inventory had a cost of $2,000.Product costs totaling $42,000 were added to work in process during the period.The number of equivalent units in ending work in process is:

• A) 450.
• B) 750.
• C) 1,275.
• D) 225.

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Definitions:

Unrealized Profits

Profits that have occurred on paper due to an asset's increased value but have not yet been cashed in by selling the asset.

Realized Profits

Refers to the gains earned and received from the sale of assets or investments, distinguished from those merely existing on paper.

Intercompany Sales

Transactions involving goods or services exchanged between subsidiaries within the same corporation, often used for internal accounting and tax purposes.

Unrealized Profits

Gains on investments or assets that have increased in value but have not yet been sold or cashed in.