Ormandy Company Uses a FIFO Process Costing System

question 111

Multiple Choice

Ormandy Company uses a FIFO process costing system.The company had 5,000 units that were 60 percent complete as to conversion costs at the beginning of the month.The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs.What are equivalent units for material,if material is added at the beginning of the process?

• A)18,000
• B)22,000
• C)25,000
• D)27,000

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Definitions:

Bonus

An additional compensation awarded to employees as a reward for their performance beyond their usual salary.

Stock Outs

Occurs when an inventory item is not available in stock, leading to potential lost sales.

Office Supplies

Various products and equipment regularly used in offices, such as paper, pens, computers, and desks.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.