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Chapter 04 Appendix A FIFO Method Answer Key
True / False Questions
1. The equivalent units in the ending work in process inventory will be the same under both
the FIFO and the weighted-average methods of process costing.
2. The cost per equivalent unit for conversion costs will always be the same under both the
FIFO and the weighted-average methods if there is no ending work in process inventory.
3. Under the FIFO method, the percentage of completion of the ending inventory must be
greater than the percentage of completion of the beginning inventory.
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4. Under the FIFO method, the equivalent units of production relate only to work done during
the current period.
5. Under the FIFO method, costs per equivalent unit will contain only costs from the current
period.
6. From the standpoint of cost control, the weighted-average method of process costing is
superior to the FIFO method.
7. The weighted-average method and the FIFO method of process costing use the same
manufacturing accounts.
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8. In the cost reconciliation report, the costs to be accounted for equals the cost of beginning
work in process inventory plus the costs added during the period.
9. In the cost reconciliation report, the costs accounted for equals the cost of beginning work
in process inventory plus the cost of ending work in process inventory.
Multiple Choice Questions
10. The FIFO method provides a major advantage over the weighted-average method in that:
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11. The weighted-average method of process costing differs from the FIFO method of process
costing in that the weighted-average method:
12. Equivalent units for a process costing system using the FIFO method would be equal to:
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13. The computation of equivalent units under the FIFO method:
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14. Elard Company uses the FIFO method in its process costing system. The first processing
department, the Welding Department, started the month with 17,000 units in its beginning
work in process inventory that were 70% complete with respect to conversion costs. The
conversion cost in this beginning work in process inventory was $101,150. An additional
68,000 units were started into production during the month. There were 23,000 units in the
ending work in process inventory of the Welding Department that were 80% complete with
respect to conversion costs. A total of $565,125 in conversion costs were incurred in the
department during the month.
The cost per equivalent unit for conversion costs is closest to:
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15. Mannarelli Corporation uses the FIFO method in its process costing system. Operating
data for the Casting Department for the month of September appear below:
According to the company’s records, the conversion cost in beginning work in process
inventory was $15,660 at the beginning of September. Additional conversion costs of
$526,524 were incurred in the department during the month.
The cost per equivalent unit for conversion costs for September is closest to: (Round off to
three decimal places.)
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16. Castle Company uses the FIFO method in its process costing system. In the Cutting
Department in June, units were four-fifths complete with respect to conversion in the
beginning work in process inventory and one-third complete with respect to conversion in the
ending work in process inventory. Other data for the department for June follow:
The cost per equivalent unit for conversion cost is closest to:
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17. Imbram Corporation uses the FIFO method in its process costing system. The first
processing department, the Forming Department, started the month with 23,000 units in its
beginning work in process inventory that were 40% complete with respect to conversion
costs. The conversion cost in this beginning work in process inventory was $27,692. An
additional 86,000 units were started into production during the month and 86,000 units were
completed and transferred to the next processing department. There were 23,000 units in the
ending work in process inventory of the Forming Department that were 10% complete with
respect to conversion costs. A total of $221,480 in conversion costs were incurred in the
department during the month.
The cost per equivalent unit for conversion costs for the month is closest to:
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18. Qik Corporation uses the FIFO method in its process costing system. Operating data for
the Cutting Department for the month of March appear below:
According to the company’s records, the conversion cost in beginning work in process
inventory was $45,662 at the beginning of March. Additional conversion costs of $305,576
were incurred in the department during the month.
The cost per equivalent unit for conversion costs for March is closest to:
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19. Herston Company uses the FIFO method in its process costing system. The beginning
work in process inventory in a particular department consisted of 6,000 units, two-thirds
complete with respect to conversion costs. During the month, 42,000 units were started and
40,000 units were completed and transferred out of the department. The company had 40,000
equivalent units for conversion costs. The ending work in process inventory in the department
consisted of:
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20. Bennett Company uses the FIFO method in its process costing system. During April the
equivalent units of production with respect to conversion costs totaled 24,600 units. Work in
process inventory on April 1 consisted of 8,000 units, 40% complete with respect to
conversion costs. A total of 25,000 units were started into production during the month and
20,000 units were transferred to finished goods. Based on this information, Bennett
Company’s work in process inventory on April 30 consisted of:
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AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom’s: Application
Learning Objective: 04A-06 Compute the equivalent units of production using the FIFO method
Level: Hard
21. Cargin Company uses the FIFO method in its process costing system. The Assembly
Department started the month with 15,000 units in its beginning work in process inventory
that were 50% complete with respect to conversion costs. An additional 71,000 units were
transferred in from the prior department during the month to begin processing in the
Assembly Department. There were 9,000 units in the ending work in process inventory of the
Assembly Department that were 30% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the
month?
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22. Kharbanda Corporation uses the FIFO method in its process costing system. Operating
data for the Enameling Department for the month of May appear below:
What were the equivalent units for conversion costs in the Enameling Department for May?
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23. Jolly Company uses the FIFO method in its process costing system. Beginning inventory
in the mixing processing center consisted of 4,000 units, 75% complete with respect to
conversion costs. Ending work in process inventory consisted of 3,000 units, 60% complete
with respect to conversion costs. If 12,000 units were transferred to the next processing center
during the period, the equivalent units for conversion costs would be:
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24. Intask Company uses the FIFO method in its process costing system. Beginning inventory
in the mixing department consisted of 6,000 units that were 75% complete with respect to
conversion costs. Ending work in process inventory consisted of 5,000 units that were 60%
complete with respect to conversion costs. If 12,000 units were transferred to the next
processing department during the period, the equivalent units for conversion cost would be:
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25. The following data were taken from the accounting records of Abacus Company which
uses the FIFO method in its process costing system:
The equivalent units are:
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26. Branden Company uses the FIFO method in its process costing system. All materials are
introduced at the beginning of the process in Department One. The following data relate to the
month of May for Department One:
What are the equivalent units for the month of May?
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27. Galos Corporation uses the FIFO method in its process costing system. The Grinding
Department started the month with 3,000 units in its beginning work in process inventory that
were 70% complete with respect to conversion costs. An additional 82,000 units were
transferred in from the prior department during the month to begin processing in the Grinding
Department. During the month 74,000 units were completed in the Grinding Department and
transferred to the next processing department. There were 11,000 units in the ending work in
process inventory of the Grinding Department that were 10% complete with respect to
conversion costs.
What were the equivalent units for conversion costs in the Grinding Department for the
month?