Pratt Corporation Uses the FIFO Method in Its Process Costing

question 56

Multiple Choice

Pratt 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.
-What are the equivalent units for materials for the month in the first processing department?

• A) 10,300
• B) 550
• C) 9,570
• D) 8,900

---

Definitions:

Put Contract

A financial contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a preset price within a specified time frame.

Put Premium

The price that an investor must pay to purchase a put option, representing the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Maximum Profit

The highest possible financial gain achievable in a transaction, strategy, or investment, assuming optimal conditions.

Maximum Potential Profit

The highest possible gain that may be achieved on a trade or investment, assuming the most favorable set of circumstances.