Castle Company Uses the FIFO Method in Its Process Costing

question 25

Multiple Choice

Castle Company uses the FIFO method in its process costing system.In the Cutting Department in June,units were four-fifths complete with respect to conversion in the beginning work in process inventory and one-third complete with respect to conversion in the ending work in process inventory.Other data for the department for June follow: The cost per equivalent unit for conversion cost is closest to:

• A)$1.40
• B)$1.35
• C)$1.21
• D)$1.64

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Definitions:

Hourly Rate

The amount of money paid or charged for one hour of labor or service.

Compounded Semi-annually

The process of calculating interest on the principal balance and previously earned interest every six months.

GIC

A finance option available in Canada, the Guaranteed Investment Certificate provides investors with a secured rate of return over an established time period.

Equivalent Value

The monetary value considered to be equal in worth to a specified amount under different conditions or in a different context.