The Following Is an Account for a Production Department, Showing

question 70

Multiple Choice

The following is an account for a production department, showing its costs for one month: Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory?

• A) $12,150.
• B) $2,160.
• C) $7,560.
• D) $54,000.
• E) $37,260.

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Definitions:

Incorrect Decisions

Actions or choices made based on faulty reasoning, incorrect information, or a misunderstanding of the situation.

Internal Rate

Represents the internal rate of return (IRR), a metric used to estimate the profitability of potential investments.

Discount Rate

is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows, affecting investment valuations and interest rates on loans.

Net Present Value

The current value of a series of future cash flows, discounted back to the present using a specific rate.