Capul Company Uses the FIFO Method in Its Process Costing

question 67

Multiple Choice

Capul Company uses the FIFO method in its process costing system. The Assembly Department started the month with 5,000 units in its beginning work in process inventory that were 50% complete with respect to conversion costs. An additional 74,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 15,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?

• A) 84,000
• B) 70,500
• C) 73,000
• D) 64,000

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Definitions:

Useful Life

The estimated period over which a fixed asset is expected to be usable by the organization, impacting its depreciation calculation.

Operating Costs

The ongoing expenses related to running a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

Service Hours

The total hours spent by an organization or employee providing services to clients or working on service-related tasks.

Economic Value

The value of an asset deriving from its ability to generate income or its potential use in producing goods and services.