Pattern Corporation Uses the FIFO Method in Its Process Costing

question 70

Essay

Pattern Corporation uses the FIFO method in its process costing. The following data pertain to its Cutting Department for August.
$$\begin{array} { l c c c } & { \text { Percent Complete } } \\&\text { Units } & \text { Materials } & \text { Conversion } \\\text { Work-in-process, August 1 } & 500 & 50 \% & 45 \% \\\text { Units started into production during August } & 8,100 & & \\\text { Units cornpleted during August and transferred to } & & & \\\text { the next departrnent } & 7,200 & & \\\text { Work-in-process, August 31 } & 1,400 & 75 \% & 30 \%\end{array}$$
Required:
Compute the equivalent units of production for both materials and conversion costs for the Cutting Department for August using the FIFO method.

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Definitions:

Economic Freedom

The degree to which individuals and businesses can make economic decisions without government intervention.

Central Planning

A system where the government or a centralized authority makes all decisions about the production and distribution of goods and services.

Industry Output

The total production of goods and services by all firms in a particular industry over a specific time period.

Chain Reaction

A sequence of reactions where a reactive product or by-product causes additional reactions to take place, often leading to a self-sustaining series of events.