Question 1

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:
A)$580,000
B)$557,000
C)$290,000
D)$55,000

Accepted Answer

C

Question 2

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:
A)6,700 units
B)11,700 units
C)10,300 units
D)13,000 units

Accepted Answer

A

Question 3

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

This is because the FIFO method separates units from different time periods, and only accounts for the units produced in the current period as complete units. The weighted-average method, on the other hand, combines units from different time periods and averages them together. As a result, the FIFO method will only include units that are fully completed, leading to potentially lower equivalent units compared to the weighted-average method.

Question 4

Malaviya Corporation uses the FIFO method in its process costing system.Operating data for the Casting Department for the month of September appear below: $\begin{array}{lrc}
&&\text { Percent Complete with}\
&\text {  Units }&\text { Respect to Conversion}\
\text { Beginning work in process inventory.... }  & 17,000 & 40 \% \
\text { Transferred in from the prior department } & & \
\text { during September....................... } & 72,000 \
\text { Ending work in process inventory ......... } & 18,000 & 30 \%
\end{array}$ 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. )
A)$8.060
B)$9.280
C)$9.087
D)$9.400

Accepted Answer

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

Question 5

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

If there is no beginning work in process inventory, both methods will calculate the cost per equivalent unit for conversion costs as the total conversion costs in the period divided by the total equivalent units produced in the period. Therefore, the cost per equivalent unit for conversion costs will always be the same under both methods.

Question 6

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?
A)69,800
B)80,000
C)72,800
D)66,000

Accepted Answer

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Question 7

Ozdemir Company uses the FIFO method in its process costing system.Operating data for the Brazing Department for the month of November appear below: $\begin{array}{lrc}
&&\text { Percent Complete with}\
&\text {  Units }&\text { Respect to Conversion}\
\text { Beginning work in process inventory.... }  &2,600 & 90 \% \
\text { Transferred in from the prior department } & & \
\text { during  November....................... } & 56,800 \
\text { Completed and transferred to the next}\
\text {  department during  November}&57,500\
\text { Ending work in process inventory ......... } & 1,900& 80 \%
\end{array}$
 What were the equivalent units for conversion costs in the Brazing Department for November?
A)57,500
B)56,680
C)56,100
D)59,020

Accepted Answer

Equivalent units for conversion costs = Units completed and transferred out + (Ending work in process inventory x % complete with respect to conversion)= 57,500 + (1,900 x 80%)= 57,500 + 1,520= 56,680

Question 8

Kets Corporation uses the FIFO method in its process costing system.Operating data for the Enameling Department for the month of May appear below: $\begin{array}{lrc}
&&\text { Percent Complete with}\
&\text {  Units }&\text { Respect to Conversion}\
\text { Beginning work in process inventory.... }  & 6,100 & 10 \% \
\text { Transferred in from the prior department } & & \
\text { during May....................... } & 82,500 \
\text { Ending work in process inventory ......... } & 8,000 & 40 \%
\end{array}$
 What were the equivalent units for conversion costs in the Enameling Department for May?
A)83,190
B)80,600
C)83,800
D)84,400

Accepted Answer

Equivalent units for conversion costs = Units transferred out + (Ending work in process units x % complete for conversion)= 82,500 + (8,000 x 40%)= 82,500 + 3,200= 83,190

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:
A)the same as that computed under the weighted-average method.
B)higher than that computed under the weighted-average method.
C)lower than that computed under the weighted-average method.
D)could be lower than,the same as,or higher than that computed under the weighted-average method.

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

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

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Question 11

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: $\begin{array}{llcc}
  \text { Beginning work in process inventory: } &\
 \text {  Cost......................................................} &\$17,500\
 \text {  Units.....................................................} &20,000& \text {  units}\
 \text { Percentage completion: } &\
 \text { Materials.............................................. } &100\%\
 \text { Conversion.......................................... } &60\%\
 \text { Units completed and transferred out.... } &75,000& \text {  units}\
 \text { Cost per equivalent unit: } &\
 \text { Material.............................................. } &\$1.75\
 \text { Conversion......................................... } &\$0.50\
\end{array}$ The cost of the 75,000 units transferred out of the department during June is:
A)$151,250
B)$145,250
C)$131,500
D)$168,750

Accepted Answer

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

Question 12

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: $\begin{array}{llcc}
& \text {Units  }\
  \text { Work in process, beginning ( \( 40 \% $ complete)..................... } &20,000\
 \text {  Started in June.................................................................} &160,000\
 \text { Completed in June and transferred to the next processing } &\
 \text { department...................................................................... } &170,000\
 \text {Work in process, ending ( $ 60 \% $ complete).........................  } &10,000\

\end{array}\)
 The equivalent units for conversion costs are:
A)160,000
B)168,000
C)180,000
D)176,000

Accepted Answer

Equivalent units = Units started + (Units in ending WIP x % complete)= 160,000 + (10,000 x 60%)= 160,000 + 6,000= 168,000

Question 13

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. )
A)$2.900
B)$2.748
C)$2.690
D)$2.314

Accepted Answer

- Units accounted for:

Beginning work in process inventory = 21,000 units 
Units started into production = 98,000 units 
Total units to account for = 119,000 units 
Units transferred out + ending work in process inventory = 95,000 + 24,000 = 119,000 units (matches total)

- Cost per equivalent unit for conversion costs:

Beginning work in process inventory costs = $6,090 
Costs added during the month = $269,269 
Total costs = $6,090 + $269,269 = $275,359

Equivalent units for conversion costs:

Units transferred out: 
= 95,000 units x 100% complete 
= 95,000 equivalent units

Ending work in process inventory: 
= 24,000 units x 30% complete 
= 7,200 equivalent units

Total equivalent units: 
= 95,000 + 7,200 
= 102,200 equivalent units

Cost per equivalent unit for conversion costs: 
= Total costs / Total equivalent units 
= $275,359 / 102,200 
= $2.690 (rounded off to three decimal places)

Therefore, the cost per equivalent unit for conversion costs for the month is $2.690, which corresponds to choice C.

Question 14

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 relate only to work done during the current period because it assumes that the first units produced are the first ones sold, and any work done on the beginning inventory is considered complete before the current period.

Question 15

Quill Corporation uses the FIFO method in its process costing system.Operating data for the Cutting Department for the month of March appear below: $\begin{array}{lrc}
&&\text { Percent Complete with}\
&\text {  Units }&\text { Respect to Conversion}\
\text { Beginning work in process inventory.... }  & 6,500 & 10 \% \
\text { Transferred in from the prior department } & & \
\text { during March....................... } & 50,000 \
\text { Completed and transferred to the next}\
\text {  department during March}&54,500\
\text { Ending work in process inventory ......... } & 2,00& 80 \%
\end{array}$ 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. )
A)$8.413
B)$7.586
C)$7.534
D)$7.720

Accepted Answer

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

Question 16

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?
A)84,000
B)70,500
C)73,000
D)64,000

Accepted Answer

Equivalent units for conversion costs = Units completed and transferred out + Equivalent units in ending inventory

Units completed and transferred out = 74,000 units
Equivalent units in ending inventory = 15,000 units × 60% = 9,000 units

To calculate the equivalent units in beginning inventory, we need to know the number of units that were started and completed during the month. Since we only know that there were 5,000 units in beginning inventory that were 50% complete with respect to conversion costs, we cannot determine the equivalent units in beginning inventory.

Total equivalent units for conversion costs = 74,000 units + 9,000 units = 70,500 units.

Therefore, the correct answer is B) 70,500.

Question 17

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 answer of The cost per equivalent unit under the...

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:
A)$3,500
B)$3,900
C)$5,900
D)$8,000

Accepted Answer

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Question 19

Tenicheff Corporation uses the FIFO method in its process costing system.Operating data for the Curing Department for the month of March appear below: $\begin{array}{lrc}
&&\text { Percent Complete with}\
&\text {  Units }&\text { Respect to Conversion}\
\text { Beginning work in process inventory.... }  & 8,200 & 50 \% \
\text { Transferred in from the prior department } & & \
\text { during March...................................... } & 49,000 \
\text { Completed and transferred to the next}\
\text {  department during March.....................}&56,200\
\text { Ending work in process inventory ......... } & 1,000& 40 \%
\end{array}$
 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?
A)$134,880
B)$117,600
C)$135,290
D)$125,040

Accepted Answer

The equivalent units for conversion costs for the units completed and transferred out are 56,200. The conversion cost assigned is calculated as: (56,200 units * $2.40 per unit) + $10,250 = $135,290.

Question 20

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. )
A)$2.880
B)$3.200
C)$2.950
D)$3.050

Accepted Answer

Equivalent units of production for conversion costs:

Beginning work in process inventory: 10,000 units × 40% = 4,000 units
Units started into production during the month: 94,000 units × 100% = 94,000 units
Ending work in process inventory: 14,000 units × 80% = 11,200 units
Total equivalent units of production: 4,000 units + 94,000 units + 11,200 units = 109,200 units

Total conversion costs: $12,800 (beginning work in process) + $286,740 (current costs) = $299,540

Cost per equivalent unit for conversion costs: $299,540 ÷ 109,200 units = $2.950 (rounded off to three decimal places)

Therefore, the best choice is C ($2.950) as it is the cost per equivalent unit for conversion costs.

Quiz 9: Fifo Method

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.

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.

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:

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.

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

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.