Auguste Corporation Uses the FIFO Method in Its Process Costing $\quad$

question 10

Essay

Auguste Corporation uses the FIFO method in its process costing.The following data pertain to its Assembly Department for October. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\underline{\text { Percent Complete }}$
$\begin{array}{lrr}&\text { Units }&\text {Materials}&\text { Conversion }\\\text { Work in process, October 1.................... } & 500 & 70 \%&15\% \\\text { Units started into production during October... } & 9,400 & \\\text { Units completed during October and } & & \\\text { transferred to the next department ............ } & 8,800 & \\\text { Work in process, October } 31 \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots . & 1,100 & 75 \%&20\%\end{array}$
Required:
Compute the equivalent units of production for both materials and conversion costs for the Assembly Department for October using the FIFO method.

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Definitions:

Potential Output

The economy’s maximum sustainable output, given the supply of resources, technology, and rules of the game; the output level when there are no surprises about the price level.

Natural Rate

The natural rate refers to the long-term unemployment rate that an economy experiences under normal conditions, unaffected by short-term cyclical fluctuations.

Full-Employment

A scenario where an economy utilizes all accessible labor resources in the most optimized manner.

Potential Output

Represents the highest level of real Gross Domestic Product (GDP) that can be sustained over the long term without increasing the rate of inflation.