Billings Corporation Uses the FIFO Method in Its Process Costing

question 42

Multiple Choice

Billings Corporation uses the FIFO method in its process costing system.On July 1,Department A had 10,000 units in process that were 80% complete with respect to conversion.On July 31 the department had 8,000 units in process that were 60% complete with respect to conversion.The department transferred 40,000 units out during the month,of which 10,000 units came from the beginning work in process inventory,and 30,000 units were started and completed during the month.All materials are added at the beginning of the process in Department A.What are the equivalent units of production for the month for materials and conversion,respectively?

• A) 38,000 units and 36,800 units
• B) 38,000 units and 38,000 units
• C) 48,000 units and 44,800 units
• D) 48,000 units and 48,000 units

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Definitions:

Total Revenue

Total revenue is the total amount of money generated by a business from the sale of its goods or services before any costs or expenses are subtracted.

Minimum Wage

A legally established lower limit on the hourly wage that employers can pay their employees.

Perfectly Competitive

Pertains to a market condition where all participants have equal access to information and transactions, resulting in an efficient distribution of resources.

Marginal Product

The additional output derived from employing one more unit of a given input, while keeping other inputs constant.