Which of the Following Is True of the Calculation of the Cost

question 14

Multiple Choice

Which of the following is true of the calculation of the cost per good unit (a unit that is completed and transferred out) under the weighted-average process costing method?

• A) the equivalent units in the denominator include goods completed and transferred out and all units that were spoiled
• B) the numerator only includes the materials and conversion costs of good units and excludes the costs of spoiled units
• C) the equivalent units in the denominator include goods completed and transferred out and excludes the units that were spoiled
• D) the calculation is total costs transferred out divided by the good units that were transferred out

---

Definitions:

Fiscal Year

A one-year period that companies use for financial reporting and budgeting, which may not align with the calendar year.

Depreciation Expense

The process of distributing the financial burden of a tangible asset over its life expectancy.

General Journal Entry

A General Journal Entry is a record of financial transactions in the general ledger, detailing the accounts affected, amounts, and dates, serving as the first step in the accounting cycle.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial condition at a specific moment, showing assets, liabilities, and shareholders' equity.