Travel Trails,Inc.manufactures railway coaches and uses the FIFO method of process costing to record costs.The Work-in-Process Inventory of the Heating Department on October 1 was 74% complete for materials and 23% complete for conversion costs.On October 31,its ending Work-in-Process Inventory was 84% complete for materials and 41% complete for conversion costs.This means that for the ending inventory,________% of the materials and ________% of the conversion costs were added during October.

Question

Quizplus · Accepted Answer

The FIFO method of process costing assumes that the first units that enter the production process are the first ones to be completed, and that costs are transferred to subsequent departments or finished goods in a chronological order.

Using the information provided, we can determine the percentage of materials and conversion costs that were added to the work-in-process inventory during October as follows:

- Materials:
Ending inventory % complete for materials - Beginning inventory % complete for materials = % of materials added during October
84% - 74% = 10%
Therefore, 10% of the materials were added during October.

- Conversion costs:
Ending inventory % complete for conversion costs - Beginning inventory % complete for conversion costs = % of conversion costs added during October
41% - 23% = 18%
Therefore, 18% of the conversion costs were added during October.

Therefore, the answer is C) 84; 41