Xeno, Inc Operates a Process Costing System and Uses the FIFO

question 113

Multiple Choice

Xeno, Inc. operates a process costing system and uses the FIFO method. Beginning work in process consists of 1,000 units, 30% complete. Ending work in process is 15% complete, and direct materials are added at the 20% point. The equivalent units of production for materials are 14,000 and for conversion costs are 18,000.
The number of units in ending work in process was:

• A) 37,000
• B) 14,000
• C) 18,000
• D) 22,000

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Definitions:

Sunk Cost Fallacy

The misconception that future decisions should be influenced by previously incurred costs that cannot be recovered.

Marginal Cost-Benefit Calculations

The process of evaluating whether the additional benefits of an action or investment outweigh its additional costs.

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, representing how fixed costs spread out over units of output as production increases.

Total Costs

Total costs are the sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.