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

question 71

Multiple Choice

Guasson 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 6,400 units were started and 5,800 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 50% 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 at least three decimal places.
-The cost per equivalent unit for materials for the month in the first processing department is closest to:

• A) $22.35
• B) $20.59
• C) $21.81
• D) $21.10

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Definitions:

Cost Method

Cost Method is an accounting methodology for investment, where the investment is recorded at its acquisition cost without considering dividends or changes in market value.

Bond Premium

The amount by which the market price of a bond exceeds its principal amount or face value, often occurring when the bond's interest rate is higher than the current market rate.

Acquisition Differential

The difference between the purchase price of an acquired company and the fair value of its identifiable net assets, often accounted for as goodwill or amortized over time.

Impairment Losses

Financial losses recognized when the carrying amount of an asset exceeds its recoverable amount, indicating the asset is not worth its current value on the balance sheet.