Accountancy MCQs
Topic Notes: Accountancy
General Description
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
1
Calculate the weighted average cost if the total cost incurred for work-in-process inventory is $350,000 and the total equivalent units completed to date are 3,500.
Answer:
$100
To determine the weighted average cost per unit, divide the total accumulated costs by the total number of equivalent units produced. In this scenario, $350,000 divided by 3,500 units equals $100 per unit. This calculation is a fundamental aspect of process costing, allowing managers to assign accurate values to both finished goods and remaining work-in-process inventory.
2
What is the standard formula used to determine the weighted average cost in production accounting?
Answer:
Weighted average cost
The weighted average cost is calculated by taking the total cost of the work-in-process inventory and dividing it by the total number of equivalent units produced during the period. This method smooths out cost fluctuations over time, providing a representative cost per unit that is useful for inventory valuation and cost of goods sold calculations in process costing environments.