Ebis Corporation Uses the FIFO Method in Its Process Costing

question 29

Multiple Choice

Ebis Corporation uses the FIFO method in its process costing system. The first processing department, the Welding Department, started the month with 13,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $12,610. An additional 89,000 units were started into production during the month. There were 22,000 units in the ending work in process inventory of the Welding Department that were 30% complete with respect to conversion costs. A total of $806,085 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs is closest to:

• A)$8.026
• B)$9.700
• C)$9.057
• D)$9.450

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Definitions:

Financial Statements

Documents that offer a summary of a company's financial status, encompassing the balance sheet, income statement, and cash flow statement.

Treasury Stock

Shares that were issued and subsequently reacquired by a company, held in its own treasury.

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities.

Prior Period Adjustment

Corrections of material errors related to a prior period or periods, excluded from the determination of net income.