A Company Uses the FIFO Method for Inventory Costing

question 102

Multiple Choice

A company uses the FIFO method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. Compute the number of equivalent units produced by the department.

• A) 181,500.
• B) 165,000.
• C) 173,500.
• D) 145,000.
• E) 187,000.

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Definitions:

Straight-Line Method

An accounting method of depreciation that allocates an equal amount of depreciation each year over an asset's useful life.

Currency Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much one currency is worth in terms of the other.

Functional Currency

The primary currency of the primary economic environment in which an entity operates and carries out its financial transactions.

Conditions

Circumstances or factors that affect the performance and outcomes of a business or agreement.