Figure 5-11
Gill Ltd Beginning Inventory Was 70 Per Cent Complete

question 24

Multiple Choice

Figure 5-11
Gill Ltd. adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for March 2004 are as follows:
$\begin{array}{lrrr}&&\text { Costs }\\&\text { Units } & \text { Materials } & \text { Conversion } \\\text { Work in progress, March 1 } & 25,000 & £ 68,750 & £ 167,650 \\\text { Started during March } & 100,000 & 300,000 & 903,350 \\\text { Work in nrogress March } 31 & 10000 & &\end{array}$ Beginning inventory was 70 per cent complete. Ending inventory was 40 per cent complete.
-Refer to Figure 5-11. How many equivalent units for materials would there be for Gill Ltd. in March using the FIFO method?

• A)100,000 units
• B)110,000 units
• C)125,000 units
• D)119,000 units

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Definitions:

Cash Disbursements

Outgoing payments made by a business, often documented in a cash disbursement journal, including expenses, creditor payments, and other financial outflows.

Cost of Goods Sold

Cost of goods sold (COGS) represents the direct costs attributable to the production of goods sold by a company, including materials and labor.

Merchandise Inventories

Goods or products that a company holds for the purpose of sale to customers in the ordinary course of business.

Sales Budget

A detailed plan that estimates future sales, usually expressed in both units and dollars, for a specific period.