A Company Uses a Process Cost Accounting System and the FIFO

question 76

Multiple Choice

A company uses a process cost accounting system and the FIFO inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, 3/4 complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are 1/4 complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $24,000 and overhead costs of $32,000 for the period. The direct labor cost per equivalent unit is:

• A) $0.126
• B) $0.160
• C) $0.178
• D) $0.213
• E) $0.373

---

Definitions:

Mental Set

The perspective that a person takes and the assumptions he makes in approaching a problem.

Analogical Representation

A mental representation of one thing that is similar in some way to another; used in problem-solving and reasoning.

Propositions

Statements or assertions that express judgments or opinions which can be either true or false.

Symbolic

Pertaining to symbols or symbolism; using symbols to represent ideas or qualities.