A Company Uses the Weighted Average Method for Inventory Costing

question 154

Multiple Choice

A company uses the weighted average method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. All of these are with respect to labor. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor.

• A) $4.40.
• B) $4.76.
• C) $4.19.
• D) $4.55.
• E) $4.61.

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Definitions:

Demand-Enhancing Union

A labor union strategy aimed at increasing demand for the products and services produced by its members.

Wage Rate

The standard amount of compensation received by a worker per unit of time (hour, day, etc.) for their labor.

Labor Productivity

A measure of economic performance that calculates the amount of goods and services produced per unit of labor.

Nominal Wages

Refers to the actual money paid to workers, not adjusted for inflation.