Sparky Corporation Uses the FIFO Method of Process Costing

question 31

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 conversion.

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

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Definitions:

Production Function

A mathematical equation describing the maximum output of a system given certain inputs and resources.

J/L Ratio

Typically refers to the job-to-labor ratio, indicating the number of available job positions per labor unit in the market.

Cartoonists' Labor

The creative and artistic work performed by cartoonists, including drawing and storyboarding.

Production Function

A mathematical representation that details how inputs like labor and capital are transformed into outputs, the goods or services produced by a firm.