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

question 46

Multiple Choice

Guo Corporation uses the weighted-average method in its process costing system.This month,the beginning inventory in the first processing department consisted of 500 units.The costs and percentage completion of these units in beginning inventory were: A total of 9,700 units were started and 9,100 units were transferred to the second processing department during the month.The following costs were incurred in the first processing department during the month: The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error.In all cases,select the answer that is the closest to the answer you computed.To reduce rounding error,carry out all computations to three decimal places.
The cost per equivalent unit for conversion costs for the first department for the month is closest to:

• A)$37.11
• B)$38.14
• C)$40.05
• D)$37.92

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Definitions:

Overhead Costs

Indirect costs of products or services.

Capacity-Sustaining Cost

Costs incurred to maintain the production capacity of a company at current levels, including costs for maintenance and repair of equipment.

Batch-Level Cost

Costs that are incurred as a result of producing a batch of products, rather than the production process as a whole.