The Following Information Is Provided: Materials and Conversion Are Incurred

question 50

Multiple Choice

The following information is provided: Materials and conversion are incurred uniformly throughout the process.
What would be the equivalent units of production for conversion when using the weighted average method?

• A)17,400
• B)18,600
• C)21,000
• D)22,000

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of production costs.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of fully completed units for inventory valuation.

Process Costing System

A financial recording method for allocating expenses to identical items that are manufactured in bulk through an uninterrupted process.

Weighted-Average Method

A costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighting by the number of units.