Salmon Manufacturing Ltd Uses a Process Costing System

question 25

Multiple Choice

Salmon Manufacturing Ltd uses a process costing system. Direct materials are added at the beginning of the process. During January, Department Q had a beginning inventory of 2,000 units, 25% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 60% complete for conversion costs. Using FIFO process costing, the equivalent units for direct materials for the month were

• A) 13,600
• B) 14,000
• C) 16,000
• D) 15,600

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Definitions:

Trading Security

A financial instrument that is bought and sold for short-term profit within the same accounting period.

Unrealized Loss Account

An account on financial statements representing losses that have been recognized but not yet realized through a transaction.

Fair Value Adjustment

An accounting adjustment made to update the reported value of a financial asset or liability to its current market value or fair value.

Stock Investments Account

A financial account holding shares of stocks that represents ownership in companies.