FIFO Aluminum processes a single type of aluminum.During the current period the following information was given: $$\begin{array} { | l | l | l | l | }
\hline & \text { Units } & \text { Material Costs } & \text { Conversion Costs } \
\hline \text { Beginning Inventory } & 3,000 & \$ 4,500 & \$ 4,800 \
\hline \text { Started During the Current Period } & 20,000 & 48,000 & 65,000 \
\hline \text { Ending Inventory } & 2,500 & & \
\hline
\end{array}$$ All materials are added at the beginning of the production process.The beginning inventory was 30% complete as to conversion,while the ending inventory was 40% completed for conversion purposes.
FIFO Aluminum uses the first-in,first-out system of process costing.
What were the costs assigned to the units transferred out this period (round equivalent unit cost to the nearest penny)?
A) $113,160
B) $113,236
C) $113,980
D) $122,300

Question

FIFO Aluminum processes a single type of aluminum.During the current period the following information was given: $$\begin{array} { | l | l | l | l | } 
\hline & \text { Units } & \text { Material Costs } & \text { Conversion Costs } \
\hline \text { Beginning Inventory } & 3,000 & \$ 4,500 & \$ 4,800 \
\hline \text { Started During the Current Period } & 20,000 & 48,000 & 65,000 \
\hline \text { Ending Inventory } & 2,500 & & \
\hline
\end{array}$$ All materials are added at the beginning of the production process.The beginning inventory was 30% complete as to conversion,while the ending inventory was 40% completed for conversion purposes.
FIFO Aluminum uses the first-in,first-out system of process costing.
What were the costs assigned to the units transferred out this period (round equivalent unit cost to the nearest penny)?
A) $113,160
B) $113,236
C) $113,980
D) $122,300

Quizplus · Accepted Answer

The costs assigned to units transferred out are calculated by considering the costs of beginning inventory and the costs added during the period. Under FIFO, the costs of beginning inventory are completed first, and then the costs for the units started and completed during the period are added. The equivalent units for conversion costs are calculated separately, considering the percentage completion.

FIFO Aluminum Processes a Single Type of Aluminum All Materials Are Added at the Beginning of the Production