Osman Corporation Uses the FIFO Method in Its Process Costing

question 43

Multiple Choice

Osman 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 materials for the month in the first processing department is closest to:

• A) $28.57
• B) $26.57
• C) $27.87
• D) $23.97

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Definitions:

Standard Cost

The planned cost for a unit of product or service, serving as a benchmark for evaluating performance and setting budgets.

Net Operating Income

The profit a company makes after deducting its operating expenses, without accounting for taxes and interest.

Selling And Administrative Expenses

These are expenses that are not directly tied to the production of goods or services, including costs such as salaries of sales personnel and marketing expenses.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of materials, based on budgeted prices.