Fraser Manufacturing Had No Work in Process at the Beginning

question 17

Multiple Choice

Fraser Manufacturing had no work in process at the beginning of a month. It transferred 6,000 units to finished goods during the month, and 800 units were still in process at the end of the month. Equivalent production for the month was 6,480 units. At what stage of completion were the unfinished units at the end of the month?

• A) 60 percent
• B) 40 percent
• C) 30 percent
• D) 80 percent (6,480 - 6,000)/800.

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Definitions:

Allowance Method

An accounting technique used to estimate and prepare for the amount of accounts receivable that may not be collectible.

Uncollectible Accounts

Accounts receivable that a company does not expect to collect and thus writes off as a loss.

Accounting Convention

Accepted accounting principles that guide the reporting and financial presentation of a company's accounts.

Qualitative Characteristics

Attributes that enhance the usefulness of financial information, including understandability, relevance, reliability, and comparability.