Imbram Corporation Uses the FIFO Method in Its Process Costing

question 37

Multiple Choice

Imbram Corporation uses the FIFO method in its process costing system.The first processing department,the Forming Department,started the month with 23,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs.The conversion cost in this beginning work in process inventory was $27,692.An additional 86,000 units were started into production during the month and 86,000 units were completed and transferred to the next processing department.There were 23,000 units in the ending work in process inventory of the Forming Department that were 10% complete with respect to conversion costs.A total of $221,480 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

• A)$2.80
• B)$2.29
• C)$3.01
• D)$2.58

Identify factors that can cause shifts in the production possibilities frontier (PPF).

Distinguish between efficient, inefficient, and unattainable points on the production possibilities frontier.

Explain the concept of opportunity cost in decision-making.

Understand how employment levels relate to economic production and efficiency.

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Definitions:

Barriers To Entry

Economic or legislative obstacles that prevent new competitors from easily entering an industry or area of business.

Monopoly Power

The degree of power held by a singular entity to control prices or exclude competition within a market.

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market more efficiently than multiple firms due to high fixed or startup costs.

Economies Of Scale

The cost advantage that arises with increased output of a product, as fixed costs are spread over more units of production, reducing the cost per unit.