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:

Capital Budgeting

The procedure a company follows to assess possible significant projects or investments.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project by discounting all expected future cash flows to their present value using a specific discount rate.

Firm's Risk Character

The inherent risk profile of a company, based on its operations, industry sector, financial position, and other factors, affecting its return and stock valuation.

Financial Results

A summary of a company's performance over a specific period, including income, expenses, profit, and loss.