Carson Corporation Uses the FIFO Method in Its Process Costing

question 10

Multiple Choice

Carson Corporation uses the FIFO method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work in process inventory that were 20% 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 8,000 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)72,000
• B)75,600
• C)76,000
• D)76,800

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Definitions:

Cash-Basis Accounting

Accounting basis in which companies record revenue when they receive cash and an expense when they pay out cash.

Revenue Recognition Principle

An accounting principle stating that revenue should be recorded when it is earned and realizable, regardless of when the cash is received.

Expense Recognition Principle

An accounting principle that states expenses should be recognized and recorded when they are incurred, regardless of the timing of cash payments.

Financial Statements

Papers that give a summary of a corporation's financial status, featuring the balance sheet, income statement, and statement of cash flows.