When Using the First-In, First-Out Method of Process Costing, Equivalent

question 67

Multiple Choice

When using the first-in, first-out method of process costing, equivalent units for work done during this period is equal to the number of units:

• A)In work-in-process at the beginning of the period times the percent of work necessary to complete the items, plus the number of units started and completed during the period, plus the number of units remaining in work-in-process at the end of the period times the percent of work done during the period.
• B)In work-in-process at the beginning of the period, plus the number of units started during the period, plus the number of units remaining in work-in-process at the end of the period times the percent of work necessary to complete the items.
• C)Started into process during the period, plus the number of units in work-in-process at the beginning of the period.
• D)Transferred out during the period, plus the number of units remaining in work-in-process at the end of the period times the percent of work necessary to complete the items.
• E)None of the above.

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Definitions:

First-In, First-Out

An inventory valuation method that assumes the first items placed in inventory are the first sold.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process.

Cost Of Production Report

A financial report detailing the total cost and production quantities of a manufacturing department or process.

Production

The process of creating goods or services using labor, machinery, and materials to meet consumer demand.