Kirkpatrick Company Uses a Process-Cost System with the FIFO Method

question 74

Multiple Choice

Kirkpatrick Company uses a process-cost system with the FIFO method of accounting for beginning inventories. Materials are added at the beginning of the process, and conversion costs are incurred uniformly. Work-in-process at the beginning is assumed to be 40 percent complete and at the end to be 70 percent complete. Additional data follow:

-The equivalent units for conversion costs are

• A) 130,000.
• B) 144,000.
• C) 116,000.
• D) 135,600.

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Definitions:

Cash Break-even

The point at which a business's cash inflows match its cash outflows, meaning the business is making just enough to cover its cash operating expenses.

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A measure of how much capital is used in the production process, indicating the extent to which a business or economy relies on capital equipment compared to labor.

Production Process

The series of actions or steps taken to manufacture a product from raw materials to the finished goods.

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An alternative wheel mounting system utilizing studs for alignment and security, specific to certain vehicle types, enhancing durability and stability.