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

question 65

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 FIFO costing method. The following data are available for one of its accounting periods: $\begin{array}{|l|l|l|}\hline & \text { Units } & \\\hline \text { Begining work in process } & 26,000 & \text { (70 percent complete for conversion costs) } \\\hline \text { Units stented } & 180,000 & \\\hline \text { Units transferred out } & 191,000 & \\\hline \text { Endling work in process } & 15,000 & \text { (60 percent complete for conversion costs) } \\\hline\end{array}$
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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:

Net New Equity

The difference between equity capital a company raises by issuing new shares and the capital it uses to buy back existing shares.

Dividend Payments

Allocations of a segment of a company's profits, determined by the board of directors, to a category of its stockholders.

Current Liabilities

These are obligations or debts that a company is expected to pay within one year.

Current Assets

Assets that are expected to be converted into cash, sold or consumed within the next year or within the business's normal operating cycle.