CAF-5 · Chapter 7 · Question 9 of 10
In a continuous process where direct materials are added completely at the very beginning of the process, what is the degree of completion for materials in the closing Work-in-Progress (WIP)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 100%
Explanation
If materials are added entirely at the beginning of the process (as is common in the first process), all units in closing WIP are 100% complete with respect to direct materials, even if conversion is only partially complete.
More Process Costing MCQs
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- Q2How is the scrap value of a "Normal Loss" treated when calculating the cost per equivalent unit of good output?
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- Q5At what value is an "Abnormal Loss" or "Abnormal Gain" recorded in the main process account?