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

question 111

Multiple Choice

Baker Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work in process inventory that were 90% complete with respect to conversion costs. An additional 95,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 11,000 units in the ending work in process inventory of the Assembly Department that were 90% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

• A)94,700
• B)101,900
• C)98,000
• D)92,000

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Definitions:

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting standards and procedures that companies must follow when they compile their financial statements.

Accounting Estimate

Approximations or judgments made by management when preparing financial statements, due to uncertainty in determining the exact amounts.

Multiple Periods

Refers to accounting or financial analysis over several time frames, such as quarters or years, to evaluate performance or investments.

Double-Declining-Balance Depreciation

A method of accelerated depreciation where the asset's book value is reduced at double the rate of traditional straight-line depreciation.