Overboard Corporation Uses the FIFO Method in Its Process Costing

question 50

Multiple Choice

Overboard Corporation uses the FIFO method in its process costing system.In the Cutting Department in June, units were 80% complete with respect to conversion in the beginning work in process inventory and 25% complete with respect to conversion in the ending work in process inventory.Other data for the department for June follow: The cost per equivalent unit for conversion cost is closest to:

• A)$1.75
• B)$1.51
• C)$1.45
• D)$1.98

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Definitions:

Maturity Structure

The classification of a portfolio or entity's liabilities based on the time frame until those obligations mature or are due for payment.

Obligations

Duties carried by entities or individuals that arise from contractual agreements, law, or regulation requiring them to act in a certain manner.

Capital Structure

Refers to the mix of different types of debt and equity that a company uses to finance its overall operations and growth.

Productive Capacity

The maximum output or production level that can be achieved with the available inputs and resources without stressing the production system.