Riggs Company Uses a FIFO Process Costing System

question 85

Multiple Choice

Riggs 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

Understand and calculate the simple rate of return for an investment.

Evaluate the financial attractiveness of investments considering different aspects like intangible benefits, tax implications, renovation costs, and depreciation.

Apply correct discount factors to cash flows based on project life and discount rate.

Make investment decisions based on calculated NPV, payback period, and simple rate of return values.

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a particular period, providing insights into its financial performance.

Absorption Costing

A product costing method in accounting that adds up all manufacturing expenses, including direct materials, direct labor, and both kinds of overheads (variable and fixed), to derive a product’s cost.

Variable Costing

An accounting method that only includes variable production costs (materials, labor, and overhead) in product costs, excluding fixed overhead.

Direct Labor

Direct labor comprises the labor costs of workers directly involved in the production of goods or services.