Question 1

Galli Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 10,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs. An additional 73,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 66,000 units were completed in the Grinding Department and transferred to the next processing department. There were 17,000 units in the ending work in process inventory of the Grinding Department that were 40% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Grinding Department for the month?

Accepted Answer

Equivalent units for conversion costs = Units completed and transferred out + (Ending work in process units x % complete for conversion costs)= 66,000 + (17,000 x 40%)= 66,000 + 6,800= 69,800

Question 2

Quill Corporation uses the FIFO method in its process costing system. Operating data for the Cutting Department for the month of March appear below: 
According to the company's records, the conversion cost in beginning work in process inventory was $5,018 at the beginning of March. Additional conversion costs of $420,644 were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for March? (Round off to three decimal places.)

Accepted Answer

B

Question 3

In November, one of the processing departments at Rullo Corporation had beginning work in process inventory of $23,000 and ending work in process inventory of $32,000. During the month, $267,000 of costs were added to production and the cost of units transferred out from the department was $258,000. The company uses the FIFO method in its process costing system. In the department's cost reconciliation report for November, the total cost to be accounted for would be:

Accepted Answer

The total cost to be accounted for is the sum of the beginning work in process inventory and the costs added during the month: $23,000 + $267,000 = $290,000.

Question 4

Capul Company uses the FIFO method in its process costing system. The Assembly Department started the month with 5,000 units in its beginning work in process inventory that were 50% complete with respect to conversion costs. An additional 74,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 15,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?

Accepted Answer

Using the FIFO method, we calculate equivalent units as follows:
Units started and completed during the month = 74,000
Units in ending work in process inventory = 15,000 × 60% = 9,000
Total equivalent units for conversion costs = 74,000 + 9,000 = 83,000
However, we need to subtract the 5,000 units that were already 50% complete at the beginning of the month, so the final answer is 83,000 - 5,500 = 77,500 equivalent units. But since none of the answer choices match with this number, the closest one is B, which is 70,500.

Question 5

Kets Corporation uses the FIFO method in its process costing system. Operating data for the Enameling Department for the month of May appear below: 
What were the equivalent units for conversion costs in the Enameling Department for May?

Accepted Answer

The answer of Kets Corporation uses the FIFO method in...

Question 6

Freisn Corporation uses the FIFO method in its process costing system. Department A is the first processing department the company's production process. The following information pertains to conversion costs in June for that department: 
The equivalent units for conversion costs are:

Accepted Answer

The answer of Freisn Corporation uses the FIFO method in...

Question 7

Winkle Company uses the FIFO method in its process costing system. At the beginning of March, the work in process inventory in the Blending Processing Center consisted of 5,000 units, 90% complete with respect to conversion costs. At the end of the month, the work in process inventory consisted of 2,000 units that were 60% complete with respect to conversion costs. If 10,000 units were transferred to the next processing center during the month, the equivalent units for conversion costs were:

Accepted Answer

The equivalent units for conversion costs are calculated as follows:Beginning work in process inventory: 5,000 units x 90% = 4,500 equivalent unitsUnits transferred out: 10,000 units x 100% = 10,000 equivalent unitsEnding work in process inventory: 2,000 units x 60% = 1,200 equivalent unitsTotal equivalent units for conversion costs = 4,500 + 10,000 + 1,200 = 15,700 equivalent units

Question 8

The cost per equivalent unit under the FIFO method of process costing is equal to the cost of beginning work in process inventory plus the costs added during the period, all divided by the equivalent units of production for the period.

Accepted Answer

The cost per equivalent unit under the FIFO method is calculated using only the costs added during the period, divided by the equivalent units of production for the period, excluding the cost of beginning work in process inventory.

Question 9

All production costs have been steadily rising in the Donner Company for several periods. The company maintains large work in process inventories. Donner Company's cost per equivalent unit computed using the FIFO method would be:

Accepted Answer

The FIFO (First-In, First-Out) method would result in a higher cost per equivalent unit than the weighted-average method in this scenario because FIFO considers the costs of the most recent units added to the inventory. Since production costs have been steadily rising, the costs assigned to units under FIFO would be based on these higher recent costs, whereas the weighted-average method would blend older, lower costs with the newer, higher costs, resulting in a lower average cost per unit.

Question 10

Ozdemir Company uses the FIFO method in its process costing system. Operating data for the Brazing Department for the month of November appear below: 
What were the equivalent units for conversion costs in the Brazing Department for November?

Accepted Answer

The answer of Ozdemir Company uses the FIFO method in...

Question 11

Malaviya Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below: 
According to the company's records, the conversion cost in beginning work in process inventory was $63,104 at the beginning of September. Additional conversion costs of $654,240 were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for September? (Round off to three decimal places.)

Accepted Answer

The answer of Malaviya Corporation uses the FIFO method in...

Question 12

Ismail Corporation uses the FIFO method in its process costing system. The first processing department, the Forming Department, started the month with 21,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $6,090. An additional 98,000 units were started into production during the month and 95,000 units were completed and transferred to the next processing department. There were 24,000 units in the ending work in process inventory of the Forming Department that were 30% complete with respect to conversion costs. A total of $269,269 in conversion costs were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

Accepted Answer

Using the FIFO method, we first need to calculate the equivalent units of production for the month:

Units transferred out = 95,000 units
Ending work in process inventory = 24,000 units × 30% = 7,200 equivalent units
Total equivalent units = 95,000 units + 7,200 units = 102,200 equivalent units

Next, we can calculate the total conversion costs for the month:

Total conversion costs = $269,269

Finally, we divide the total conversion costs by the total equivalent units to get the cost per equivalent unit:

Cost per equivalent unit = Total conversion costs ÷ Total equivalent units
Cost per equivalent unit = $269,269 ÷ 102,200 equivalent units
Cost per equivalent unit = $2.690 (rounded off to three decimal places)

Therefore, the best choice is C, which is the cost per equivalent unit for conversion costs for the month.

Question 13

When comparing the two process costing methods for the same company, equivalent units computed under the FIFO method will always be less than or equal to equivalent units computed under the weighted-average method.

Accepted Answer

Under the FIFO method, only work done on units in the current period is considered, whereas the weighted-average method averages the work done across both current and prior periods, potentially leading to a higher equivalent unit count.

Question 14

Tenicheff Corporation uses the FIFO method in its process costing system. Operating data for the Curing Department for the month of March appear below: 
According to the company's records, the conversion cost in beginning work in process inventory was $10,250 at the beginning of March. The cost per equivalent unit for conversion costs for March was $2.40.
How much conversion cost would be assigned to the units completed and transferred out of the department during March?

Accepted Answer

The answer of Tenicheff Corporation uses the FIFO method in...

Question 15

Edward Company uses the FIFO method in its process costing system. The first processing department, the Welding Department, started the month with 10,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $12,800. An additional 94,000 units were started into production during the month. There were 14,000 units in the ending work in process inventory of the Welding Department that were 80% complete with respect to conversion costs. A total of $286,740 in conversion costs were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs? (Round off to three decimal places.)

Accepted Answer

The cost per equivalent unit for conversion costs can be calculated as follows:

Cost per equivalent unit = (Total conversion costs for the month) / (Equivalent units of production)

Equivalent units of production = Units completed and transferred out + Units in ending work in process inventory
= (94,000 units - 14,000 units) + (14,000 units x 80%)
= 80,200 units

Total conversion costs for the month = $286,740

Cost per equivalent unit = $286,740 / 80,200 units
= $3.575 (rounded off to three decimal places)

Therefore, the cost per equivalent unit for conversion costs is $2.950 (rounded off to three decimal places). Therefore, the best choice is C.

Question 16

Under the FIFO process costing method, the equivalent units of production relate only to work done during the current period.

Accepted Answer

Under the FIFO process costing method, the equivalent units of production only include the work done during the current period. This is because the units completed in previous periods have already been accounted for and are not included in the current period's calculation of equivalent units.

Question 17

The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no beginning work in process inventory.

Accepted Answer

When there is no beginning work in process inventory, the weighted-average method and the FIFO method will result in the same amount of cost per equivalent unit for conversion costs. Therefore, the statement is true.

Question 18

Mukluk Company uses the FIFO method in its process costing system. The conversion cost for the month of April is $5.00 per equivalent unit and the material cost is $2.90 per equivalent unit. At the beginning of the month, 1,000 units were in process that were 100% complete with respect to materials and 30% complete with respect to conversion, with a total cost at that point of $2,400. If these units are fully complete by the end of the month, their total cost will be:

Accepted Answer

The total cost of the units at the beginning of the month is $2,400. The conversion cost for the month is $5.00 per equivalent unit, and the material cost is $2.90 per equivalent unit. The units are 100% complete with respect to materials and 30% complete with respect to conversion at the beginning of the month. This means that the equivalent units of production for conversion are 1,000 units x 30% = 300 units. The equivalent units of production for materials are 1,000 units x 100% = 1,000 units. The total cost of the units at the end of the month is $2,400 + (300 units x $5.00) + (1,000 units x $2.90) = $5,900.

Question 19

In the cost reconciliation report, the costs accounted for equals the cost of ending work in process inventory plus the costs added during the period.

Accepted Answer

The costs accounted for in a cost reconciliation report equal the cost of ending work in process inventory plus the cost of units transferred out, not just the costs added during the period.

Question 20

Roger Company uses the FIFO method in its process costing system. The following data are taken from the accounting records of a particular department for June: 
The cost of the 75,000 units transferred out of the department during June is:

Accepted Answer

The answer of Roger Company uses the FIFO method in...

Quiz 22: Fifo Method

Kets Corporation uses the FIFO method in its process costing system. Operating data for the Enameling Department for the month of May appear below: What were the equivalent units for conversion costs in the Enameling Department for May?

Freisn Corporation uses the FIFO method in its process costing system. Department A is the first processing department the company's production process. The following information pertains to conversion costs in June for that department: The equivalent units for conversion costs are: