Which of the Following Is True When Computing Cost Per

question 100

Multiple Choice

Which of the following is true when computing cost per equivalent unit in a FIFO process costing system?

• A) Prior period costs are combined with costs incurred in the current period and then divided by the equivalent units of production.
• B) Costs incurred in the current period are divided by the equivalent units of production.
• C) Total cost to account for is divided by the equivalent units of production.
• D) Equivalent units of production are divided by costs incurred in the current period.
• E) Equivalent units of production are divided by cost to account for.

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Definitions:

Factory Depreciation

The systematic allocation of the cost of a manufacturing plant over its useful life.

Advertising Budget

The financial allocation set aside by a business for promoting its products or brand.

Sales Budget

An estimate of the sales revenue a company aims to achieve in a certain period.