Moulgadi Corporation Uses the FIFO Method in Its Process Costing

question 61

Multiple Choice

Moulgadi Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-The cost per equivalent unit for conversion costs for the first department for the month is closest to:

• A) $37.87
• B) $39.76
• C) $43.81
• D) $41.20

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing beyond direct materials and direct labor, such as maintenance, utilities, and salaries of supervisory personnel.

Direct Labor

The cost of wages for employees directly involved in the production of goods or services.

Process Costing System

A costing method used in industries where production is continuous and units are indistinguishable from each other, allocating costs to units of product based on the process they go through.

Work In Process Accounts

Accounts used to track the costs of unfinished goods in production processes at any point in time.