Karmen Company Uses the FIFO Method in Its Process Costing

question 100

Multiple Choice

Karmen Company uses the FIFO method in its process costing system.Operating data for the Enamelling Department for the month of May appear below:
$$\begin{array} { | l | r | r | } \hline & \text { Units } & \text { Percentage complete } \\\hline \text { Beginning work in process } & 2,400 & 40 \% \\ \text { inventory } & & \\\hline \text { Transferred in from the } & 87,000 & \\\text { prior department during } & & \\\text { May } & & \\\hline \begin{array} { l } \text { Ending work in process } \\\text { inventory }\end{array} &8,600 &60\% \\\hline\end{array}$$
What were the equivalent units of production for conversion costs in the Enamelling Department for May?

• A) 85,000 units.
• B) 85,960 units.
• C) 93,200 units.
• D) 80,800 units.

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Definitions:

Bounded Rationality

A concept suggesting that in decision-making, individuals' rationality is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions.

Rational Model

A decision-making process that involves identifying a problem, generating alternative solutions, selecting the best option, and implementing it, assuming a logical and systematic approach.

Completely Rational

Refers to the assumption that individuals make decisions based on fully logical reasoning and have full information available to them.

Rational Model

A decision-making model based on logical and objective analysis of alternatives, aiming for the most optimal solution.