The Following Data Relate to the Blending Department of Tru-Colour

question 26

Multiple Choice

The following data relate to the Blending Department of Tru-Colour Paint Company for a recent month: $\begin{array} { | l | r | r | } \hline & \text { Number of Units } & \begin{array} { r } \text { Conversion costs } \\\text { percentage complete }\end{array} \\\hline \begin{array} { l } \text { Beginning work in process } \\\text { inventory }\end{array} & 9,000 & 60 \% \\\hline \begin{array} { l } \text { Units started into } \\\text { production }\end{array} & 45,000 & \\\hline \begin{array} { l } \text { Units completed and } \\\text { transferred out }\end{array} & 46,000 & \\\hline \begin{array} { l } \text { Ending work in process } \\\text { inventory }\end{array} & 8,000 & 25 \% \\\hline\end{array}$ All materials are added prior to the beginning of work in the Blending Department.




- Assuming that Tru-Colour Paint Company uses the FIFO method,what are the equivalent units of production for conversion costs?

• A) 42,600 units.
• B) 44,400 units.
• C) 46,000 units.
• D) 54,000 units.

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Definitions:

Profit

The financial gain accrued from a business activity when total revenues exceed total expenses.

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.

Long Run

An economic period in which all inputs, including capital, can be adjusted, allowing firms to fully adapt to market changes.

Output

The total amount of goods and services produced by an economy or a production process over a certain period of time.