A Company Uses the FIFO Method for Inventory Costing

question 126

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. All of these are with respect to labor. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor.

• A) $4.40.
• B) $4.76.
• C) $4.19.
• D) $4.55.
• E) $4.61.

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Definitions:

Merchantable

A legal term referring to goods that meet basic quality standards and are fit for the purpose for which goods of that kind are usually purchased.

UCC

Represents the Uniform Commercial Code, a broad series of legal provisions that regulate commercial activities across the United States.

Enacted Values

The values and norms that are actually exhibited or converted into employee behavior within an organization.

Organizational Members

Individuals who belong to and participate in the functioning of an organization, including employees, managers, and stakeholders.