Fabian Corporation Uses the Weighted-Average Method in Its Process Costing

question 66

Multiple Choice

Fabian Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 9,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 90,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 87,000 units were completed in the Assembly Department and transferred to the next processing department. There were 12,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

• A)93,000
• B)83,100
• C)87,000
• D)89,400

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Definitions:

Direct Labor Costs

Wages and benefits paid to employees who are directly involved in the production of goods or services.

Indirect Costs

Expenses not directly tied to the production of goods or services, such as overhead, rent, and administrative salaries.

Manufacturing Environment

A setting where goods are produced on a large scale using machinery, labor, and other resources.

Factory Overhead Incurred

The total costs associated with operating a factory that are not directly related to the production, including utilities, maintenance, and property taxes.