Gaba Corporation Uses the FIFO Method in Its Process Costing

question 82

Multiple Choice

Gaba Corporation uses the FIFO method in its process costing system.The Grinding Department started the month with 17,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs.An additional 60,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department.During the month 70,000 units were completed in the Grinding Department and transferred to the next processing department.There were 7,000 units in the ending work in process inventory of the Grinding Department that were 10% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Grinding Department for the month?

• A) 70,700
• B) 60,500
• C) 50,000
• D) 70,000

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Definitions:

Total Credits

In accounting, the sum of all credit entries recorded, representing increases in liabilities, revenue, or equity.

Consolidated Income

The total net income of a parent company and its subsidiaries, after accounting for the share of income pertaining to noncontrolling interests.

Subsidiaries

Companies that are owned or controlled by another company, known as the parent company, through a majority of the voting stock.

Domestic Firm

A company that operates primarily within the borders of its home country and is subject to its home country's jurisdiction and regulations.