Galli Corporation Uses the FIFO Method in Its Process Costing

question 4

Multiple Choice

Galli Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 10,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs. An additional 73,000 units were transferred in from the prior department during the month to begin processing in the Grinding Department. During the month 66,000 units were completed in the Grinding Department and transferred to the next processing department. There were 17,000 units in the ending work in process inventory of the Grinding Department that were 40% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Grinding Department for the month?

• A) 69,800
• B) 80,000
• C) 72,800
• D) 66,000

---

Definitions:

Direct Cost

Costs that can be directly attributed to the production of a specific good or service, such as raw materials and labor.

GAAP-Adhering

Compliance with Generally Accepted Accounting Principles, which are accounting standards aimed at ensuring the financial statements of a company are transparent and consistent.

Useful Managerial Reports

Reports generated within a company to help managers make decisions regarding the company's operations.

Factory Overhead Cost

Indirect costs related to manufacturing that cannot be directly tied to a specific product, including maintenance, utilities, and salaries of supervisory personnel.