Neco 2022 Financial Accounting Question 3

Practice objective / multiple choice question 3 from the 2022 Neco Financial Accounting examination.

Neco 2022 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 3 NECO • 2022 • FINANCIAL_ACCOUNTING • objective

The company uses a weighted‑average process costing system. Opening work‑in‑process (WIP) consists of 2,000 units that are 30% complete as to conversion. During the month 8,000 units are started. Closing WIP consists of 1,500 units that are 40% complete as to conversion. Direct materials are added at the start of the process and total material cost incurred is \(560,000\) naira. Direct labour cost incurred is \(240,000\) naira and manufacturing overhead is applied at 150% of direct labour cost. Using the weighted‑average method, calculate (i) the total cost per equivalent unit for conversion, and (ii) the total cost assigned to units completed and transferred out.

Answer Options

A. Conversion cost per equivalent unit: 62.50 naira; Total cost transferred out: 990,000 naira
Correct Answer B. Conversion cost per equivalent unit: 65.93 naira; Total cost transferred out: 1,036,440 naira
C. Conversion cost per equivalent unit: 70.00 naira; Total cost transferred out: 1,080,000 naira
D. Conversion cost per equivalent unit: 68.20 naira; Total cost transferred out: 1,050,000 naira
Correct Answer
B
Correct Option:
Conversion cost per equivalent unit: 65.93 naira; Total cost transferred out: 1,036,440 naira

About This Question

This is Neco 2022 Financial Accounting Question 3. It is one of the objective questions from the 2022 Neco Financial Accounting examination.

Difficulty level: Hard .

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