If Conversion Costs Are Added Evenly Throughout the Production Process

question 52

Multiple Choice

If conversion costs are added evenly throughout the production process, and the units have made it 50% of the way through the production process, then the percentage completion for conversion costs is

• A)0%.
• B)50%.
• C)100%.
• D)none of the above.

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Definitions:

FIFO Method

First-In, First-Out method, an inventory valuation technique where goods first added to inventory are assumed to be the first ones sold.

Cost Per Equivalent Unit

A calculation used in process costing to allocate costs equally among produced units.

Weighted-Average Method

An accounting method used in inventory valuation or cost accounting that averages the costs of all goods available for sale based on their weights.

FIFO Method

Accounting approach where the first goods purchased or produced are the first ones removed from inventory and reported as cost of goods sold.