[The Following Information Applies to the Questions Displayed Below

question 72

Multiple Choice

[The following information applies to the questions displayed below.]
Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department.In June,unit costs incurred by the Mixing Department amounted to $4.00 per unit.Unit costs transferred to the finished goods warehouse during the month amounted to $22.Work-in-process inventories are reduced to zero each month.
-The entry to record the sale of 3,500 units in June would include:

• A)A debit to Work-in-Process Inventory,of $77,000.
• B)A debit to Finished Goods Inventory of $77,000.
• C)A debit to Cost of Goods Sold of $77,000.
• D)A credit to Cost of Goods Sold of $77,000.

Calculate and interpret vital formulas within merchandising financial statements, including gross profit and net income calculations.

Appreciate the nuances of inventory systems and their effect on the financial position statement.

Classify companies as merchandising entities versus other business types based on their primary source of revenue.

Understand the terminology and principles of accounting inventory systems.

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Definitions:

Positively Skewed

A distribution shape where the tail is longer on the right side, indicating that the mean and median are greater than the mode.

Chi-squared Distribution

A probability distribution that describes the distribution of the sum of the squares of variables that are independently distributed according to a standard normal distribution.

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without violating any constraints.

Hypothesis Test

A procedure in statistics to determine if there is enough evidence to reject a null hypothesis in favor of an alternative hypothesis.