Question

Q1 Salmont Corporation uses the FIFO method in its process costing system. The company reported 37,000 equivalent units of production for materials last month. The company's beginning work in process inventory consisted of 7,000 units, 40% complete with respect to materials. The ending work in process inventory consisted of 5,000 units, 70% complete with respect to materials. The number of units started during the month was:

Multiple Choice

• 37,800 units

• 35,000 units

• 34,300 units

• 36,300 units

Q2 Ozdemir Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

Beginning work in process inventory:
Units in beginning work in process inventory		300
Materials costs	$	2,000
Conversion costs	$	700
Percent complete with respect to materials		55	%
Percent complete with respect to conversion		10	%
Units started into production during the month		5,200
Units transferred to the next department during the month		4,700
Materials costs added during the month	$	76,800
Conversion costs added during the month	$	130,800
Ending work in process inventory:
Units in ending work in process inventory		800
Percent complete with respect to materials		85	%
Percent complete with respect to conversion		70	%

What are the equivalent units for conversion costs for the month in the first processing department?

Multiple Choice

• 560

• 4,400

• 5,230

• 5,500

Q3 Bellue Inc. manufactures a single product. Variable costing net operating income was $82,800 last year and its inventory decreased by 2,500 units. Fixed manufacturing overhead cost was $4 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

Garrison 16e Rechecks 2018-06-22

Multiple Choice

• $10,000

• $72,800

• $82,800

• $85,300

Q4 Krepps Corporation produces a single product. Last year, Krepps manufactured 26,030 units and sold 20,700 units. Production costs for the year were as follows:

Direct materials	$	192,622
Direct labor	$	143,165
Variable manufacturing overhead	$	210,843
Fixed manufacturing overhead	$	494,570

Sales totaled $983,250 for the year, variable selling and administrative expenses totaled $120,060, and fixed selling and administrative expenses totaled $161,386. There was no beginning inventory. Assume that direct labor is a variable cost.

Under absorption costing, the ending inventory for the year would be valued at:

Multiple Choice

• $274,700

• $283,200

• $213,200

• $240,700

Answer 1

Question 1

Correct answer------------34,300 units

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material		Material
Beginning WIP	7,000	40%		60%
Units introduced	34,300
Total units to be accounted for	41,300
Completed and Transferred unit	36,300	0%		100%
Ending WIP	5,000	0%		70%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material
Units Transferred:		% completed this period	Equivalent Units
From WIP	7,000	60%	4,200
From units started/Introduced	29,300	100%	29,300
Total	36,300		33,500
	Total Units	Material
Ending WIP		% completed this period	Equivalent Units
Total	5,000	70%	3,500
Total EUP	41,300		37,000