The Morgan Company Uses the Weighted-Average Method in Its Process

question 77

Multiple Choice

The Morgan Company uses the weighted-average method in its process costing system. For a particular department, the company had 54,000 equivalent units with respect to conversion costs in March. There were 7,500 units in the department's beginning work in process inventory, two thirds complete with respect to conversion costs. During March, 52,500 units were started and 50,000 were completed and transferred out of the department. The ending work in process inventory in the department:

• A) consisted of 5,000 units.
• B) consisted of 2,500 units.
• C) was 65% complete with respect to conversion costs.
• D) was 40% complete with respect to conversion costs.

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Definitions:

IFRS 16

An International Financial Reporting Standard that specifies how an organization should report leases in its financial statements.

Lease Receivable

An asset account that records the amounts due to the lessor from the lessee under the terms of a lease agreement.

Lease Agreement

A contract in which one party, the lessor, allows another party, the lessee, to use an asset for a specified period of time in exchange for payments.

Finance Lease Agreement

A lease in which the lessee has control over the asset being leased and substantially all risks and rewards incidental to ownership, even though legal title may not be transferred.