Chapter 04 Supplement: Process Costing Using the FIFO Method
Answer Key
True / False Questions
1.
The equivalent units of production will be the same under the weighted-average and the
FIFO method if there is no ending work in process inventory.
2.
Any difference in the equivalent units calculated under the weighted-average and the FIFO
methods is due to the units in the beginning work in process inventory.
3.
There is no difference in the unit costs computed under the weighted-average and FIFO
methods of process costing if there are no ending work in process inventories.
4.
The equivalent units of production for a department using the FIFO process costing
method is equal to the number of units completed plus the equivalent units in the ending
inventory less the equivalent units in the beginning inventory.
5.
In computing the cost per equivalent unit, costs in the beginning work in process inventory
are kept separate from current period costs when the FIFO method is used.
6.
If the FIFO cost method is used in a process costing system, costs in the beginning
inventory are kept separate from current period costs.
7.
A major advantage of the FIFO method is that it allows managers to judge the
performance of the current period independently of the performance of the prior period.
8.
In the cost reconciliation report under the FIFO method, the costs to be accounted for
equals the cost of ending work in process inventory plus the cost of units transferred out.
9.
In the cost reconciliation report under the FIFO method, the costs to be accounted for
equals the cost of beginning work in process inventory plus the cost of units transferred
out.
10.
In the cost reconciliation report under the FIFO method, the costs accounted for equals
the cost of beginning work in process inventory plus the cost of units transferred out.
11.
In the cost reconciliation report under the FIFO method, the costs accounted for equals
the cost of ending work in process inventory plus the cost of units transferred out.
Multiple Choice Questions
12.
Under which of the following conditions will the FIFO method of process costing result in
the same amount of cost being transferred to the next department as the weighted-
average method?
13.
Under the FIFO method, unit costs would:
14.
Laurie Corporation uses the FIFO method in its process costing system. Department A is
the first stage of Laurie Corporation’s production process. The following information is
available for conversion costs for the month of May for Department A:
Units
Work in process, beginning (25% complete with respect to conversion costs)
8,000
Started in May
40,000
Completed in May and transferred to Department B
38,000
Work in process, ending (60% complete with respect to conversion costs)
10,000
The equivalent units of production for conversion costs for the month are:
Conversion
Conversion: 8,000 units (100% – 25%)
Units started and completed (38,000 – 8,000)
Ending work in process inventory:
15.
Garson Corporation uses the FIFO method in its process costing system. The Grinding
Department started the month with 18,000 units in its beginning work in process inventory
that were 10% complete with respect to conversion costs. An additional 98,000 units were
transferred in from the prior department during the month to begin processing in the
Grinding Department. During the month 115,000 units were completed in the Grinding
Department and transferred to the next processing department. There were 1,000 units in
the ending work in process inventory of the Grinding Department that were 20% complete
with respect to conversion costs.
What were the equivalent units for conversion costs in the Grinding Department for the
month?
16.
Winkle Corporation uses the FIFO method in its process costing system. Beginning
inventory in the mixing processing center consisted of 5,000 units, 90% complete with
respect to conversion costs. Ending work in process inventory consisted of 2,000 units,
60% complete with respect to conversion costs. If 10,000 units were transferred to the
next processing center during the period, the equivalent units for conversion costs would
be:
17.
Karmen Corporation uses the FIFO method in its process costing system. Operating data
for the Enameling Department for the month of May appear below:
Units
Percent Complete with Respect to
Conversion
Beginning work in process inventory
2,400
40%
Transferred in from the prior department
during May
87,000
Ending work in process inventory
8,600
60%
What were the equivalent units for conversion costs in the Enameling Department for
May?
To complete beginning work in process:
Units started and completed
Ending work in process:
18.
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?
19.
Oxyrom Corporation uses the FIFO method in its process costing system. Operating data
for the Brazing Department for the month of November appear below:
Units
Percent Complete with Respect
to Conversion
Beginning work in process inventory
3,800
20%
Transferred in from the prior department
during November
46,700
Completed and transferred to the next
department during November
43,200
Ending work in process inventory
7,300
80%
What were the equivalent units for conversion costs in the Brazing Department for
November?
To complete beginning work in process:
Units started and completed
Ending work in process:
20.
Salter Corporation uses the FIFO method in its process costing system. The company
reported 25,000 equivalent units for materials last month. The company’s beginning work
in process inventory consisted of 6,000 units, 40% complete with respect to materials. The
ending work in process inventory consisted of 4,000 units, 70% complete with respect to
materials. The number of units started during the month was:
