In Order to Compute Equivalent Units of Production Using the FIFO

question 10

Multiple Choice

In order to compute equivalent units of production using the FIFO method of process costing,work for the period must be broken down to units:

• A) completed during the period and units in ending inventory.
• B) started during the period and units transferred out during the period.
• C) completed from beginning inventory,started and completed during the month,and units in ending inventory.
• D) processed during the period and units completed during the perioD.
• In theory the physical flow dictates the cost flow: (1)complete the units in beginning inventory, (2)start and complete new units,and (3)start,but don't complete the balance of new units.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Cost to Sellers

The expenses incurred by sellers in providing a good or service, including production costs, labor, materials, and overhead.

Value to Buyers

The maximum amount of money buyers are willing to pay for a good or service, reflecting the perceived utility or benefit derived from the purchase.

Cost to Sellers

The total expenses that a seller has to bear to produce and sell a product, including production, marketing, and distribution costs.