The Taylor Company Uses a Process Costing System -
Equivalent Units for Conversion Costs Are
A) 207,800

question 40

Multiple Choice

The Taylor Company uses a process costing system. Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process. The company uses the average costing method. The following data are available for one of its accounting periods: $\begin{array}{|l|l|l|}\hline & \text { Units } & \\\hline \text { Beginning work in process } & 26,000 & \text { (70 percent complete for conversion costs) } \\\hline \text { Units stated } & 180,000 & \\\hline \text { Units transferred out } & 191,000 & \\\hline \text { Ending work in process } & 15,000 & \text { (60 percent complete for conversion costs) } \\\hline & &\end{array}$
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Equivalent units for conversion costs are

• A) 207,800.
• B) 192,200.
• C) 181,800.
• D) 200,000.

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Definitions:

Economic Activity

All actions that involve the production, distribution, and consumption of goods and services in an economy.

Tax Burden

The total amount of taxes that individuals or businesses must pay to the government.

Inelastic Demand

A market condition where the demand for a product does not change significantly with a change in its price.

Elastic Supply

A scenario in which the amount of a product available for sale markedly changes in response to its price adjustments.