Which of the following is true regarding estimates of completion of units in a process costing system?
A) estimating the degree of completion with regards to conversion costs is more of a science than an art
B) estimating the degree of completion with regards to conversion costs is usually easier and more accurate than estimating the degree of completion with regards to direct materials
C) estimating the degree of completion with regards to direct materials is usually easier and more accurate than estimating the degree of completion with regards to conversion costs
D) when estimating degree of completion, the degree of completion with regards to conversion costs is usually a portion similar to the degree of completion with regards to direct materials

Question

Quizplus · Accepted Answer

Estimating the degree of completion with regards to direct materials is usually easier and more accurate than estimating the degree of completion with regards to conversion costs. This is because it is easier to physically measure and track the direct materials used in each unit of production, whereas conversion costs involve more subjective judgments about the progress of the manufacturing process (e.g. how much labor or overhead has been applied to each unit).

Which of the Following Is True Regarding Estimates of Completion