Ibarra Corporation Uses the FIFO Method in Its Process Costing

question 11

Multiple Choice

Ibarra Corporation uses the FIFO method in its process costing system.The first processing department,the Forming Department,started the month with 16,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs.The conversion cost in this beginning work in process inventory was $19,250.An additional 97,000 units were started into production during the month and 100,000 units were completed and transferred to the next processing department.There were 13,000 units in the ending work in process inventory of the Forming Department that were 30% complete with respect to conversion costs.A total of $593,123 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

• A) $6.100
• B) $5.890
• C) $5.422
• D) $6.115

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Definitions:

Tax Return

A formal document filed with a government body, reporting income, expenses, and other pertinent tax information, used to calculate tax liability.

Reports Income

The process of declaring income received during a tax year on one's tax return.

Taxpayer

A person or organization required to remit taxes to governmental bodies at any level, including federal, state, or municipal.

Tax Liability

The amount of total tax debt owed by an individual or entity to the taxing authority, such as the IRS, after all deductions, credits, and exemptions.