Krumbly Corporation Uses the FIFO Method in Its Process Costing

question 68

Multiple Choice

Krumbly Corporation uses the FIFO method in its process costing system.At the beginning of the month,Department D's work in process inventory contained 2,000 units.These units were 100% complete with respect to materials and 40% complete with respect to conversion costs,with a total cost at that point of $13,600.During the month,conversion costs amounted to $8 per equivalent unit.If all 2,000 units are fully complete by the end of the month and transferred out of the department,the total cost of the 2,000 units transferred out will be closest to:

• A) $9,600
• B) $19,600
• C) $23,200
• D) $16,000

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Definitions:

Customized Goods

Products that are specifically made according to the specifications or requirements of a customer.

Partial-Performance Exception

A legal principle that allows for the enforcement of an oral contract when one party has taken significant action based on the agreement, despite the lack of a written contract.

Merger Clauses

Provisions in a contract stating that the written document represents the entire agreement between the parties, negating any oral agreements.

Parol Evidence

The rule that prohibits the use of oral statements or agreements to contradict or vary the terms of a written contract.