Sparky Corporation Uses the FIFO Method of Process Costing

question 77

Multiple Choice

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units:
Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000. Costs incurred in February - Conversion: $599,150.
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Calculate the equivalent units of materials.

• A) 110,000
• B) 165,000
• C) 130,250
• D) 144,000
• E) 140,000

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Uncollectible Accounts

Uncollectible accounts are debts owed to a company that are considered uncollectable and are written off as a bad debt expense.

Allowance for Doubtful Accounts

A contra account that represents the estimated amount of accounts receivable which may not be collectible.

Adjusting Entry

An accounting record made to adjust revenues and expenses to match the accounting period they were incurred, ensuring compliance with the accrual basis of accounting.