Chap 04 A

Chapter 04A - FIFO Method
LO8: FIFO assignment of costs (App 4A)
LO9: FIFO Cost reconciliation (App 4A)

LO6: FIFO equivalent units (App 4A)
LO7: FIFO cost per EU (App 4A)

LO4: WAC assignment of costs
LO5: WAC Cost reconciliation
Professional Exam Adapted

LO2: WAC equivalent units
LO3: WAC cost per EU

LO1: Cost flows
Difficulty
Question
Type ID Origin CMA/CPA origin
1 T/F M x x 5/e:4-10 Authors
2 T/F H x x 5/e:4-9 Authors
3 T/F H x 5/e:4-15 Authors
4 T/F M x 6/e:4-15 Authors
8 T/F M x New, 7/11/07,C1 E.N.
9 T/F M x New, 7/11/07,D2 E.N.
Conceptual
10 M/C M x x 7/e:4-27 Authors
Conceptual
Conceptual
12 M/C M x 7/e:4-36 Authors
Conceptual
14 M/C M x x New,5/27/97,E7 E.N.
15 M/C M x x New,5/27/97,M7 E.N.
17 M/C M x x New,5/27/97,I7 E.N.
4A-1
18 M/C M x x New,5/27/97,Q7 E.N.

19 M/C H x 5/e:4-55 Authors
21 M/C M x New,5/25/97,C7 E.N.
22 M/C M x New,5/27/97,K7 E.N.
27 M/C M x New,5/27/97,G7 E.N.
28 M/C M x New,5/27/97,O7 E.N.
30 M/C M x New,5/27/97,T7 E.N.
7/12/2007 Single MC
31 M/C E x L2 E.N.
7/12/2007 Sngle MC
32 M/C M x M2 E.N.
33- M-
4A-1 36 Multipart M/C H x x x x 7/e:4-47 to 50 Authors
37-
4A-2 39 Multipart M/C M x x 6/e:4-41 to 43 Authors
40-
44- E-
46-
4A-5 52 Multipart M/C M x x x New 11/18/00 M5 E.N.
53-
4A-6 55 Multipart M/C M x x x New 11/18/00 P5 E.N.
56-
4A-7 57 Multipart M/C M x x New 11/18/00 Q5 E.N.
58-
4A-8 59 Multipart M/C M x x New 11/18/00 N5 E.N.
60-
4A-9 61 Multipart M/C M x x New 11/18/00 O5 E.N.
4A- 62-
10 63 Multipart M/C M x 5/e:4-42 to 46 Authors
4A-2
4A- 64- E-
11 65 Multipart M/C M x 7/12/2007 Multi MC K2 E.N.
4A- 66- E-
12 67 Multipart M/C M x 7/12/2007 Multi MC L2 E.N.
68 Problem M x x x x x x 2/e:3-P3-4 Authors
69 Problem H x x x New,5/28/97,D7 E.N.
70 Problem H x x x New,5/28/97,E7 E.N.
71 Problem M x 8/8/2004 Problem G4 E.N.
72 Problem M x 8/8/2004 Problem H4 E.N.
73 Problem M x New,5/28/97,F7 E.N.
74 Problem M x 8/8/2004 Problem C4 E.N.
75 Problem M x 8/8/2004 Problem D4 E.N.
76 Problem E x 8/8/2004 Problem K4 E.N.
77 Problem E x 8/8/2004 Problem L4 E.N.
78 Problem M x 8/8/2004 Problem P4 E.N.
79 Problem M x 8/8/2004 Problem Q4 E.N.
4A-3
Chapter 04A
FIFO Method
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.
True False
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.
True False
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.
True False
4. Under the FIFO method, the equivalent units of production relate only to work done during
the current period.
True False
5. Under the FIFO method, costs per equivalent unit will contain only costs from the current
period.
True False
6. From the standpoint of cost control, the weighted-average method of process costing is
superior to the FIFO method.
True False
4A-4
7. The weighted-average method and the FIFO method of process costing use the same
manufacturing accounts.
True False
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.
True False
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.
True False
Multiple Choice Questions
10. The FIFO method provides a major advantage over the weighted-average method in that:
A. the calculation of equivalent units is less complex under the FIFO method.
B. the FIFO method treats units in the beginning inventory as if they were started and
completed during the current period.
C. the FIFO method provides measurements of work done during the current period.
D. the weighted-average method ignores units in the beginning and ending work in process
inventories.
11. The weighted-average method of process costing differs from the FIFO method of process
costing in that the weighted-average method:
A. can be used under any cost flow assumption.
B. does not require the use of predetermined overhead rates.
C. keeps costs in the beginning inventory separate from current period costs.
D. does not consider the degree of completion of units in the beginning work in process
inventory when computing equivalent units of production.
4A-5
12. Equivalent units for a process costing system using the FIFO method would be equal to:
A. units completed during the period plus equivalent units in the ending work in process
inventory.
B. units started and completed during the period plus equivalent units in the ending work in
process inventory.
C. units completed during the period and transferred out.
D. units started and completed during the period plus equivalent units in the ending work in
process inventory plus work needed to complete units in the beginning work in process
inventory.
13. The computation of equivalent units under the FIFO method:

A. treats units in the beginning work in process inventory as if they were started and
B. treats units in the beginning work in process inventory as if they represent a separate batch
of goods separate and distinct from goods started and completed during the current period.
C. treats units in the ending work in process inventory as if they were started and completed
during the current period.
D. ignores units in the beginning and ending work in process inventories.
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:
A. $8.50
B. $8.31
C. $8.25
D. $7.84
4A-6
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.)
A. $5.916
B. $5.340
C. $5.220
D. $5.213
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:
A. $1.40
B. $1.35
C. $1.21
D. $1.64
4A-7
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
The cost per equivalent unit for conversion costs for the month is closest to:
A. $2.80
B. $2.29
C. $3.01
D. $2.58
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:
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:
A. $5.77
B. $5.72
C. $5.91
D. $6.04
4A-8
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:
A. 8,000 units, 25% complete with respect to conversion costs
B. 0 units
C. 8,000 units, 50% complete with respect to conversion costs
D. 4,000 units, 100% complete with respect to conversion costs
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:
B. 5,000 units, 40% complete with respect to conversion costs
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?
A. 77,000
B. 79,700
C. 65,000
D. 72,200
4A-9
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?
A. 57,960
B. 55,800
C. 51,000
D. 55,920
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:
A. 13,200 units
B. 10,800 units
C. 12,000 units
D. 13,000 units
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:
A. 12,500 units
B. 10,500 units
C. 13,500 units
D. 13,000 units
4A-10
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:

A. Material, 90,000 units; labor and overhead, 89,000 units
B. Material, 100,000 units; labor and overhead, 91,000 units
C. Material, 60,000 units; labor and overhead, 53,000 units
D. Material, 80,000 units; labor and overhead, 79,000 units
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?
A. Option A
B. Option B
C. Option C
D. Option D
4A-11
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?
A. 74,000
B. 75,100
C. 90,000
D. 73,000
28. Ozogus Company uses the FIFO method in its process costing system. Operating data for
the Brazing Department for the month of November appear below:
What were the equivalent units for conversion costs in the Brazing Department for
November?
A. 36,600
B. 35,800
C. 39,300
D. 34,800
4A-12
29. Severn Company uses the FIFO method in its process costing system. The following data
were taken from the accounting records of the company for last month:
The cost of the units in the ending Work in Process inventory is:
A. $17,000
B. $20,000
C. $10,000
D. $22,500
30. Tepla Corporation uses the FIFO method in its process costing system. Operating data for
the Curing Department for the month of March appear below:
inventory was $40,608 at the beginning of March. The cost per equivalent unit for conversion
costs for March was $9.30.
How much conversion cost would be assigned to the units completed and transferred out of
the department during March?
A. $562,152
B. $561,720
C. $520,800
D. $521,544
4A-13
31. In October, one of the processing departments at Schones Corporation had beginning
work in process inventory of $26,000 and ending work in process inventory of $17,000.
During the month, $279,000 of costs were added to production and the cost of units
transferred out from the department was $288,000. The company uses the FIFO method in its
process costing system. In the department's cost reconciliation report for October, the total
cost to be accounted for would be:
A. $584,000
B. $43,000
C. $610,000
D. $305,000
32. In November, one of the processing departments at Ijames Corporation had ending work
in process inventory of $26,000. During the month, $426,000 of costs were added to
production and the cost of units transferred out from the department was $436,000. The
company uses the FIFO method in its process costing system. In the department's cost
reconciliation report for November, the total cost to be accounted for would be:
A. $924,000
B. $888,000
C. $62,000
D. $462,000
Zippy Company has a process costing system. Information about units processed and
processing costs incurred during a recent month in the Refining Department follow:
The beginning work in process inventory had $10,946 of processing cost attached to it at the
beginning of the month. During the month, the Department incurred an additional $289,954 in
processing cost.
4A-14
33. Assuming that the company uses the weighted-average method, what are the equivalent
units for processing costs for the Department for the month?
A. 94,000
B. 100,300
C. 100,000
D. 112,000
34. Assuming that the company uses the weighted-average method, what is the cost per
equivalent unit for processing for the month?
A. $2.89
B. $2.98
C. $3.00
D. $3.08
35. Assuming that the company uses the FIFO method, what are the equivalent units for
processing costs for the Department for the month?
A. 97,300
B. 91,300
C. 94,000
D. 100,300
36. Assuming that the company uses the FIFO method, what is the cost per equivalent unit of
production for processing for the month?
A. $2.89
B. $2.98
C. $3.00
D. $3.09
4A-15
Nyman Company successfully switched to a lean production system at the beginning of

March. Therefore, as shown by the summary below, there were no work in process inventories
on hand at the end of the month.
37. If Nyman Company uses the FIFO cost method, the March equivalent units for conversion
would be:
A. 150,000 units
B. 190,000 units
C. 172,000 units
D. 168,000 units
38. If Nyman Company uses the weighted-average cost method, the March equivalent units
for materials would be:
A. 190,000 units
B. 174,000 units
C. 150,000 units
D. 166,000 units
39. If Nyman continues to successfully employ lean production and starts 140,000 units into
production during April (the next month), the April equivalent units for conversion costs using
the weighted-average method would be:
A. 150,000 units
B. 140,000 units
C. 190,000 units
D. 160,000 units
4A-16
The activity in Nolan Company's Blending Department for the month of April is given
below:
All materials are added at the beginning of processing in the Blending Department.
40. The equivalent units for material for the month, using the FIFO method, are:
A. 50,000 units
B. 58,000 units
C. 54,000 units
D. 60,000 units
41. The equivalent units for labor and overhead for the month, using the FIFO method, are:
A. 47,000 units
B. 51,000 units
C. 5,000 units
D. 54,000 units
42. The equivalent units for material for the month, using the weighted-average method, are:
A. 48,000 units
B. 50,000 units
C. 58,000 units
D. 52,000 units
43. The equivalent units for labor and overhead for the month, using the weighted-average
method, are:
A. 50,000 units
B. 51,000 units
C. 47,000 units
D. 55,000 units
4A-17
Wilson Company has a process costing system. The Assembly Department had the following
costs for May:
44. Assume that Wilson uses the FIFO method, and that for May the company computed
16,000 equivalent units for materials. The cost per equivalent unit for materials for the month
would have been:
A. $12.50
B. $3.00
C. $5.00
D. $9.50
45. Assume that Wilson uses the weighted-average method and that for May the company
computed 20,000 equivalent units for labor and overhead. The cost per equivalent unit for
labor and overhead for the month would have been:
A. $1.60
B. $10.00
C. $8.40
D. $16.00
4A-18
Morvan Corporation uses the FIFO method in its process costing system. Data concerning the
first processing department for the most recent month are listed below:
Note: Your answers may differ from those offered below due to rounding error. In all cases,
select the answer that is the closest to the answer you computed.
46. What are the equivalent units for materials for the month in the first processing
department?
A. 9,000
B. 375
C. 8,300
D. 8,715
47. What are the equivalent units for conversion costs for the month in the first processing
department?
A. 9,000
B. 8,500
C. 8,300
D. 150
4A-19
48. The cost per equivalent unit for materials for the month in the first processing department
is closest to:
A. $27.70
B. $26.82
C. $28.13
D. $28.40
49. The cost per equivalent unit for conversion costs for the first department for the month is
closest to:
A. $48.50
B. $44.72
C. $42.59
D. $43.33
50. The cost of a completed unit transferred out of the department is closest to:
A. $74.51
B. $68.27
C. $74.02
D. $70.29
51. The total cost transferred from the first processing department to the next processing
department during the month is closest to:
A. $603,400
B. $597,619
C. $632,583
D. $614,400
52. The cost of ending work in process inventory in the first processing department according
to the company's cost system is closest to:
A. $35,144
B. $16,775
C. $10,543
D. $26,358
4A-20
Prasad Corporation uses the FIFO method in its process costing system. Data concerning the
select the answer that is the closest to the answer you computed. To reduce rounding error,
carry out all computations to at least three decimal places.
department?
A. 10,500
B. 960
C. 8,300
D. 9,530
closest to:
A. $38.96
B. $43.33
C. $40.98
D. $40.91
4A-21
A. $449,250
B. $528,560
C. $485,100
D. $473,100
Qdynamic Corporation uses the FIFO method in its process costing system. Data concerning
the first processing department for the most recent month are listed below:
56. How many units were started AND completed during the month in the first processing
department?
A. 6,100
B. 5,500
C. 7,600
D. 7,000
4A-22
closest to:
A. $42.49
B. $43.96
C. $45.00
D. $41.87
Nilgiri Corporation uses the FIFO method in its process costing system. Data concerning the
department?
A. 1,680
B. 7,150
C. 8,200
D. 5,200
4A-23
closest to:
A. $40.57
B. $45.33
C. $39.31
D. $37.44
Osborne Corporation uses the FIFO method in its process costing system. Data concerning
department?
A. 6,600
B. 440
C. 7,150
D. 7,600
4A-24
is closest to:
A. $16.87
B. $15.65
C. $15.09
D. $18.00
The information below was obtained from the records of one of the departments of Cushing
Company for the month of August. The company uses the FIFO method in its process costing
system.
All materials are added at the beginning of the process.
62. The equivalent units for materials for the month of August are:
A. 75,000 units
B. 85,000 units
C. 87,500 units
D. 95,000 units
63. The equivalent units for labor and overhead for the month of August are:
A. 85,000 units
B. 95,000 units
C. 87,500 units
D. 82,500 units
In February, one of the processing departments at Grosz Corporation had beginning work in
process inventory of $18,000 and ending work in process inventory of $11,000. During the
month, the cost of units transferred out from the department was $204,000. The company uses
the FIFO method in its process costing system.
4A-25
64. In the department's cost reconciliation report for February, the costs added to production
in the department would be:
A. $211,000
B. $197,000
C. $186,000
D. $193,000
65. In the department's cost reconciliation report for February, the total cost accounted for
would be:
A. $29,000
B. $412,000
C. $215,000
D. $430,000
In May, one of the processing departments at Lukman Corporation had beginning work in
process inventory of $11,000. During the month, $120,000 of costs were added to production
and the cost of units transferred out from the department was $94,000. The company uses the
FIFO method in its process costing system.
66. In the department's cost reconciliation report for May, the cost of ending work in process
inventory would be:
A. $15,000
B. $63,000
C. $37,000
D. $26,000
67. In the department's cost reconciliation report for May, the total cost to be accounted for
would be:
A. $48,000
B. $251,000
C. $262,000
D. $131,000
4A-26
Essay Questions
68. Dita Company uses a process costing system. The following information relates to one
month's activity in the company's Curing Department.
The conversion cost of the beginning inventory was $6,500. During the month, $112,000 in
additional conversion cost was incurred.
Required:
a. Assume that the company uses the FIFO method. Compute:
1. The equivalent units of production for conversion for the month.
2. The cost per equivalent unit for conversion for the month.
3. The total cost transferred out during the month.
4. The cost assigned to the ending work in process inventory.
b. Assume that the company uses the weighted-average cost method. Compute:
The total cost transferred out during the month.
4A-27
69. Dana Inc. uses the FIFO method in its process costing system. The following data concern
the operations of the company's first processing department for a recent month.
Required:
Using the FIFO method:
a. Determine the equivalent units of production for materials and conversion costs.
b. Determine the cost per equivalent unit for materials and conversion costs.
c. Determine the cost of ending work in process inventory.
d. Determine the cost of units transferred out of the department during the month.
4A-28
70. Ermoin Inc. uses the FIFO method in its process costing system. The following data
concern the operations of the company's first processing department for a recent month.
Required:
4A-29
71. Deluz Corporation uses the FIFO method in its process costing. The following data
pertain to its Assembly Department for August.
Required:
Compute the equivalent units of production for both materials and conversion costs for the
Assembly Department for August using the FIFO method.
4A-30
72. The following data pertain to the Milling Department of Gehle Corporation for July. The
company uses the FIFO method in its process costing.
Required:
Milling Department for July using the FIFO method.
4A-31
73. Froment Inc. uses the FIFO method in its process costing system. The following data
Required:
Using the FIFO method, determine the equivalent units of production for materials and
conversion costs.
74. Glazener Corporation uses the FIFO method in its process costing. The following data
pertain to its Assembly Department for June.
Required:
Determine the equivalent units of production for the Assembly Department for June using the
FIFO method.
4A-32
75. The following data have been provided by Bicknese Corporation for the Circuit Prep
Department. The company uses the FIFO method in its process costing.
Required:
Determine the equivalent units of production for the Circuit Prep Department for August
using the FIFO method.
76. Clasby Corporation uses the FIFO method in its process costing. The following data
concern the company's Assembly Department for the month of January.
Required:
Compute the costs per equivalent unit for the Assembly Department for January using the
FIFO method.
4A-33
77. Kortge Corporation uses the FIFO method in its process costing. The following data
concern the company's Mixing Department for the month of August.
Required:
Compute the cost per equivalent unit for materials and conversion for the Mixing Department
for August using the FIFO method.
78. Dung Corporation uses the FIFO method in its process costing system. The following data
concern the company's Assembly Department for the month of August.
Required:
Determine the cost of ending work in process inventory and the cost of units transferred out of
the department during August using the FIFO method.
4A-34
79. The following data has been provided by Palafox Inc., a company that uses the FIFO
method in its process costing system. The data concern the company's Shaping Department
for the month of March.
Required:
Determine the cost of ending work in process inventory and the cost of the units transferred
out of the department during March using the FIFO method.
4A-35
Chapter 04A 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.
TRUE
AACSB: Reflective Thinking

AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 04A-02 Compute the equivalent units of production using the weighted-average method
Learning Objective: 04A-06 Compute the equivalent units of production using the FIFO method
Level: Medium
4A-36
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.
FALSE

Learning Objective: 04A-03 Compute the cost per equivalent unit using the weighted-average method
Learning Objective: 04A-07 Compute the cost per equivalent unit using the FIFO method
Level: Hard
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.
FALSE

Level: Hard
4. Under the FIFO method, the equivalent units of production relate only to work done during
the current period.
TRUE

Level: Medium
4A-37
5. Under the FIFO method, costs per equivalent unit will contain only costs from the current
period.
TRUE

Level: Medium
6. From the standpoint of cost control, the weighted-average method of process costing is
superior to the FIFO method.
FALSE

Learning Objective: 04A-08 Assign costs to units using the FIFO method
Level: Medium
7. The weighted-average method and the FIFO method of process costing use the same
manufacturing accounts.
TRUE

Level: Medium
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.
TRUE

Learning Objective: 04A-09 Prepare a cost reconciliation report using the FIFO method
Level: Medium
4A-38
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.
FALSE

Level: Medium
Multiple Choice Questions
10. The FIFO method provides a major advantage over the weighted-average method in that:
A. the calculation of equivalent units is less complex under the FIFO method.
B. the FIFO method treats units in the beginning inventory as if they were started and
C. the FIFO method provides measurements of work done during the current period.
D. the weighted-average method ignores units in the beginning and ending work in process
inventories.

Level: Medium
4A-39
11. The weighted-average method of process costing differs from the FIFO method of process
costing in that the weighted-average method:
A. can be used under any cost flow assumption.
B. does not require the use of predetermined overhead rates.
C. keeps costs in the beginning inventory separate from current period costs.
D. does not consider the degree of completion of units in the beginning work in process
inventory when computing equivalent units of production.

Level: Medium
12. Equivalent units for a process costing system using the FIFO method would be equal to:
A. units completed during the period plus equivalent units in the ending work in process
inventory.
B. units started and completed during the period plus equivalent units in the ending work in
process inventory.
C. units completed during the period and transferred out.
D. units started and completed during the period plus equivalent units in the ending work in
process inventory plus work needed to complete units in the beginning work in process
inventory.

Level: Medium
4A-40
13. The computation of equivalent units under the FIFO method:

A. treats units in the beginning work in process inventory as if they were started and
B. treats units in the beginning work in process inventory as if they represent a separate batch
of goods separate and distinct from goods started and completed during the current period.
C. treats units in the ending work in process inventory as if they were started and completed
during the current period.
D. ignores units in the beginning and ending work in process inventories.

Level: Medium
4A-41
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
The cost per equivalent unit for conversion costs is closest to:
A. $8.50
B. $8.31
C. $8.25
D. $7.84
FIFO method
Units started and completed during the period = Units started into production during the
period - Units in ending work in process inventory = 68,000 - 23,000 = 45,000
AACSB: Analytic
Bloom's: Application
Level: Medium
4A-42
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:
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.)
A. $5.916
B. $5.340
C. $5.220
D. $5.213
FIFO method
AACSB: Analytic
Level: Medium
4A-43
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:
A. $1.40
B. $1.35
C. $1.21
D. $1.64
FIFO method
Units started and completed during the period = Units completed during the period - Units in
beginning work in process inventory = 135,000 - 25,000 = 110,000
Units in beginning work in process inventory + Units started into production during the period
= Units in ending work in process inventory + Units completed during the period
25,000 + 140,000 = X + 135,000
X = 25,000 + 140,000 - 135,000 = 30,000
Y = X 1/3 = 30,000 1/3 = 10,000
Z = 5,000 + 110,000 + Y = 5,000 + 110,000 + 10,000 = 125,000
4A-44
AACSB: Analytic
Level: Medium
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
The cost per equivalent unit for conversion costs for the month is closest to:
A. $2.80
B. $2.29
C. $3.01
D. $2.58
FIFO method
AACSB: Analytic
Level: Medium
4A-45
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:
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:
A. $5.77
B. $5.72
C. $5.91
D. $6.04
FIFO method
AACSB: Analytic
Level: Medium
4A-46
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:
B. 0 units
FIFO method
2,000 + 34,000 + X = 40,000

X = 40,000 - 2,000 - 34,000 = 4,000
6,000 + 42,000 = Y + 40,000
Y = 6,000 + 42,000 - 40,000 = 8,000
YZ=X
8,000 Z = 4,000
Z = 4,000 8,000 = 0.50
AACSB: Analytic
Level: Hard
4A-47
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:
B. 5,000 units, 40% complete with respect to conversion costs
FIFO method
4,800 + 12,000 + X = 24,600

X = 24,600 - 4,800 - 12,000 = 7,800
8,000 + 25,000 = Y + 20,000
Y = 8,000 + 25,000 - 20,000 = 13,000
YZ=X
13,000 Z = 7,800
Z = 7,800 13,000 = 0.60
AACSB: Analytic
Level: Hard
4A-48
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?
A. 77,000
B. 79,700
C. 65,000
D. 72,200
FIFO method
AACSB: Analytic
Level: Medium
4A-49
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?
A. 57,960
B. 55,800
C. 51,000
D. 55,920
FIFO method
AACSB: Analytic
Level: Medium
4A-50
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:
A. 13,200 units
B. 10,800 units
C. 12,000 units
D. 13,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-51
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:
A. 12,500 units
B. 10,500 units
C. 13,500 units
D. 13,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-52
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:

A. Material, 90,000 units; labor and overhead, 89,000 units
B. Material, 100,000 units; labor and overhead, 91,000 units
C. Material, 60,000 units; labor and overhead, 53,000 units
D. Material, 80,000 units; labor and overhead, 79,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-53
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?
A. Option A
B. Option B
C. Option C
D. Option D
FIFO method
AACSB: Analytic
Level: Medium
4A-54
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?
A. 74,000
B. 75,100
C. 90,000
D. 73,000
FIFO method
period -
AACSB: Analytic
Level: Medium
4A-55
28. Ozogus Company uses the FIFO method in its process costing system. Operating data for
the Brazing Department for the month of November appear below:
What were the equivalent units for conversion costs in the Brazing Department for
November?
A. 36,600
B. 35,800
C. 39,300
D. 34,800
FIFO method
AACSB: Analytic
Level: Medium
4A-56
29. Severn Company uses the FIFO method in its process costing system. The following data
were taken from the accounting records of the company for last month:
The cost of the units in the ending Work in Process inventory is:
A. $17,000
B. $20,000
C. $10,000
D. $22,500
FIFO method
4A-57
AACSB: Analytic
Level: Hard
4A-58
30. Tepla Corporation uses the FIFO method in its process costing system. Operating data for
the Curing Department for the month of March appear below:
inventory was $40,608 at the beginning of March. The cost per equivalent unit for conversion
costs for March was $9.30.
How much conversion cost would be assigned to the units completed and transferred out of
the department during March?
A. $562,152
B. $561,720
C. $520,800
D. $521,544
4A-59
FIFO method
AACSB: Analytic
Level: Medium
4A-60
31. In October, one of the processing departments at Schones Corporation had beginning
work in process inventory of $26,000 and ending work in process inventory of $17,000.
During the month, $279,000 of costs were added to production and the cost of units
transferred out from the department was $288,000. The company uses the FIFO method in its
process costing system. In the department's cost reconciliation report for October, the total
cost to be accounted for would be:
A. $584,000
B. $43,000
C. $610,000
D. $305,000
FIFO method
AACSB: Analytic
Level: Easy
4A-61
32. In November, one of the processing departments at Ijames Corporation had ending work
in process inventory of $26,000. During the month, $426,000 of costs were added to
production and the cost of units transferred out from the department was $436,000. The
company uses the FIFO method in its process costing system. In the department's cost
reconciliation report for November, the total cost to be accounted for would be:
A. $924,000
B. $888,000
C. $62,000
D. $462,000
FIFO method
AACSB: Analytic
Level: Medium
Zippy Company has a process costing system. Information about units processed and
processing costs incurred during a recent month in the Refining Department follow:
The beginning work in process inventory had $10,946 of processing cost attached to it at the
beginning of the month. During the month, the Department incurred an additional $289,954 in
processing cost.
4A-62
33. Assuming that the company uses the weighted-average method, what are the equivalent
units for processing costs for the Department for the month?
A. 94,000
B. 100,300
C. 100,000
D. 112,000
Weighted-average method
AACSB: Analytic
Level: Medium
4A-63
34. Assuming that the company uses the weighted-average method, what is the cost per
equivalent unit for processing for the month?
A. $2.89
B. $2.98
C. $3.00
D. $3.08
AACSB: Analytic
Level: Hard
4A-64
35. Assuming that the company uses the FIFO method, what are the equivalent units for
processing costs for the Department for the month?
A. 97,300
B. 91,300
C. 94,000
D. 100,300
FIFO method
AACSB: Analytic
Level: Medium
4A-65
36. Assuming that the company uses the FIFO method, what is the cost per equivalent unit of
production for processing for the month?
A. $2.89
B. $2.98
C. $3.00
D. $3.09
FIFO method
AACSB: Analytic
Level: Medium
Nyman Company successfully switched to a lean production system at the beginning of

March. Therefore, as shown by the summary below, there were no work in process inventories
on hand at the end of the month.
4A-66
37. If Nyman Company uses the FIFO cost method, the March equivalent units for conversion
would be:
A. 150,000 units
B. 190,000 units
C. 172,000 units
D. 168,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-67
38. If Nyman Company uses the weighted-average cost method, the March equivalent units
for materials would be:
A. 190,000 units
B. 174,000 units
C. 150,000 units
D. 166,000 units
AACSB: Analytic
Level: Medium
4A-68
39. If Nyman continues to successfully employ lean production and starts 140,000 units into
production during April (the next month), the April equivalent units for conversion costs using
the weighted-average method would be:
A. 150,000 units
B. 140,000 units
C. 190,000 units
D. 160,000 units
With lean production there should be no beginning or ending inventories.
AACSB: Analytic
Level: Medium
The activity in Nolan Company's Blending Department for the month of April is given
below:
All materials are added at the beginning of processing in the Blending Department.
4A-69
40. The equivalent units for material for the month, using the FIFO method, are:
A. 50,000 units
B. 58,000 units
C. 54,000 units
D. 60,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-70
41. The equivalent units for labor and overhead for the month, using the FIFO method, are:
A. 47,000 units
B. 51,000 units
C. 5,000 units
D. 54,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-71
42. The equivalent units for material for the month, using the weighted-average method, are:
A. 48,000 units
B. 50,000 units
C. 58,000 units
D. 52,000 units
Units in beginning work in process inventory + Units started into production = Units in
ending work in process inventory + Units transferred to the next department
Units transferred to the next department = Units in beginning work in process inventory +
Units started into production - Units in ending work in process inventory = 8,000 + 50,000 -
10,000 = 48,000
AACSB: Analytic
Level: Medium
4A-72
43. The equivalent units for labor and overhead for the month, using the weighted-average
method, are:
A. 50,000 units
B. 51,000 units
C. 47,000 units
D. 55,000 units
Units in beginning work in process inventory + Units started into production = Units in
ending work in process inventory + Units transferred to the next department
Units transferred to the next department = Units in beginning work in process inventory +
Units started into production - Units in ending work in process inventory = 8,000 + 50,000 -
10,000 = 48,000
AACSB: Analytic
Level: Medium
Wilson Company has a process costing system. The Assembly Department had the following
costs for May:
4A-73
44. Assume that Wilson uses the FIFO method, and that for May the company computed
16,000 equivalent units for materials. The cost per equivalent unit for materials for the month
would have been:
A. $12.50
B. $3.00
C. $5.00
D. $9.50
FIFO method
AACSB: Analytic
Level: Medium
4A-74
45. Assume that Wilson uses the weighted-average method and that for May the company
computed 20,000 equivalent units for labor and overhead. The cost per equivalent unit for
labor and overhead for the month would have been:
A. $1.60
B. $10.00
C. $8.40
D. $16.00
AACSB: Analytic
Level: Easy
4A-75
Morvan Corporation uses the FIFO method in its process costing system. Data concerning the
select the answer that is the closest to the answer you computed.
4A-76
department?
A. 9,000
B. 375
C. 8,300
D. 8,715
FIFO method
beginning work in process inventory = 8,500 - 200 = 8,300
AACSB: Analytic
Level: Medium
4A-77
department?
A. 9,000
B. 8,500
C. 8,300
D. 150
FIFO method
AACSB: Analytic
Level: Medium
4A-78
is closest to:
A. $27.70
B. $26.82
C. $28.13
D. $28.40
FIFO method
AACSB: Analytic
Level: Medium
4A-79
closest to:
A. $48.50
B. $44.72
C. $42.59
D. $43.33
FIFO method
AACSB: Analytic
Level: Medium
4A-80
50. The cost of a completed unit transferred out of the department is closest to:
A. $74.51
B. $68.27
C. $74.02
D. $70.29
FIFO method
AACSB: Analytic
Level: Medium
4A-81
A. $603,400
B. $597,619
C. $632,583
D. $614,400
FIFO method
Note: The answer without any rounding error is $597,619.
4A-82
AACSB: Analytic
Level: Medium
52. The cost of ending work in process inventory in the first processing department according
to the company's cost system is closest to:
A. $35,144
B. $16,775
C. $10,543
D. $26,358
FIFO method
AACSB: Analytic
Level: Medium
4A-83
Prasad Corporation uses the FIFO method in its process costing system. Data concerning the
4A-84
department?
A. 10,500
B. 960
C. 8,300
D. 9,530
FIFO method
AACSB: Analytic
Level: Medium
4A-85
closest to:
A. $38.96
B. $43.33
C. $40.98
D. $40.91
FIFO method
AACSB: Analytic
Level: Medium
4A-86
A. $449,250
B. $528,560
C. $485,100
D. $473,100
FIFO method
Note: With no rounding, the answer is $449,250.
4A-87
AACSB: Analytic
Level: Medium
Qdynamic Corporation uses the FIFO method in its process costing system. Data concerning
56. How many units were started AND completed during the month in the first processing
department?
A. 6,100
B. 5,500
C. 7,600
D. 7,000
FIFO method
AACSB: Analytic
Level: Medium
4A-88
closest to:
A. $42.49
B. $43.96
C. $45.00
D. $41.87
FIFO method
AACSB: Analytic
Level: Medium
4A-89
Nilgiri Corporation uses the FIFO method in its process costing system. Data concerning the
4A-90
department?
A. 1,680
B. 7,150
C. 8,200
D. 5,200
FIFO method
AACSB: Analytic
Level: Medium
4A-91
closest to:
A. $40.57
B. $45.33
C. $39.31
D. $37.44
FIFO method
AACSB: Analytic
Level: Medium
4A-92
Osborne Corporation uses the FIFO method in its process costing system. Data concerning
4A-93
department?
A. 6,600
B. 440
C. 7,150
D. 7,600
FIFO method
AACSB: Analytic
Level: Medium
4A-94
is closest to:
A. $16.87
B. $15.65
C. $15.09
D. $18.00
FIFO method
AACSB: Analytic
Level: Medium
The information below was obtained from the records of one of the departments of Cushing
Company for the month of August. The company uses the FIFO method in its process costing
system.
All materials are added at the beginning of the process.
4A-95
62. The equivalent units for materials for the month of August are:
A. 75,000 units
B. 85,000 units
C. 87,500 units
D. 95,000 units
FIFO method
AACSB: Analytic
Level: Medium
4A-96
63. The equivalent units for labor and overhead for the month of August are:
A. 85,000 units
B. 95,000 units
C. 87,500 units
D. 82,500 units
FIFO method
AACSB: Analytic
Level: Medium
In February, one of the processing departments at Grosz Corporation had beginning work in
process inventory of $18,000 and ending work in process inventory of $11,000. During the
month, the cost of units transferred out from the department was $204,000. The company uses
the FIFO method in its process costing system.
4A-97
64. In the department's cost reconciliation report for February, the costs added to production
in the department would be:
A. $211,000
B. $197,000
C. $186,000
D. $193,000
FIFO method
AACSB: Analytic
Level: Medium
4A-98
65. In the department's cost reconciliation report for February, the total cost accounted for
would be:
A. $29,000
B. $412,000
C. $215,000
D. $430,000
FIFO method
AACSB: Analytic
Level: Easy
In May, one of the processing departments at Lukman Corporation had beginning work in
process inventory of $11,000. During the month, $120,000 of costs were added to production
and the cost of units transferred out from the department was $94,000. The company uses the
FIFO method in its process costing system.
4A-99
66. In the department's cost reconciliation report for May, the cost of ending work in process
inventory would be:
A. $15,000
B. $63,000
C. $37,000
D. $26,000
FIFO method
AACSB: Analytic
Level: Medium
4A-100
67. In the department's cost reconciliation report for May, the total cost to be accounted for
would be:
A. $48,000
B. $251,000
C. $262,000
D. $131,000
FIFO method
AACSB: Analytic
Level: Easy
Essay Questions
4A-101
68. Dita Company uses a process costing system. The following information relates to one
month's activity in the company's Curing Department.
The conversion cost of the beginning inventory was $6,500. During the month, $112,000 in
additional conversion cost was incurred.
Required:
a. Assume that the company uses the FIFO method. Compute:
3. The total cost transferred out during the month.
b. Assume that the company uses the weighted-average cost method. Compute:
The total cost transferred out during the month.
4A-102
a. FIFO method
1. Units started and completed during the period = Units completed during the period - Units
in beginning work in process inventory = 26,000 - 10,000 = 16,000
2. $112,000 28,000 EUs = $4 per EU.
4. 5,000 80% $4 per EU = $16,000

b. Weighted-average method
$118,500 30,000 EUs = $3.95 per EU

3. 26,000 $3.95 per EU = $102,700
4. 5,000 80% $3.95 per EU = $15,800
4A-103
AACSB: Analytic
Learning Objective: 04A-04 Assign costs to units using the weighted-average method
Level: Medium
4A-104
69. Dana Inc. uses the FIFO method in its process costing system. The following data concern
the operations of the company's first processing department for a recent month.
Required:
4A-105
FIFO method:
a. Units started and completed during the period = Units completed during the period - Units
in beginning work in process inventory = 14,600 - 700 = 13,900
4A-106
AACSB: Analytic
Level: Hard
4A-107
70. Ermoin Inc. uses the FIFO method in its process costing system. The following data
Required:
4A-108
FIFO method:
AACSB: Analytic
Level: Hard
4A-109
71. Deluz Corporation uses the FIFO method in its process costing. The following data
pertain to its Assembly Department for August.
Required:
Assembly Department for August using the FIFO method.
FIFO method:
4A-110
72. The following data pertain to the Milling Department of Gehle Corporation for July. The
company uses the FIFO method in its process costing.
Required:
Milling Department for July using the FIFO method.
FIFO method:
AACSB: Analytic
Level: Medium
4A-111
73. Froment Inc. uses the FIFO method in its process costing system. The following data
Required:
Using the FIFO method, determine the equivalent units of production for materials and
conversion costs.
FIFO method:
period - Units in ending work in process inventory = 28,000 - 100 = 27,900
AACSB: Analytic
Level: Medium
4A-112
74. Glazener Corporation uses the FIFO method in its process costing. The following data
pertain to its Assembly Department for June.
Required:
Determine the equivalent units of production for the Assembly Department for June using the
FIFO method.
FIFO method:
AACSB: Analytic
Level: Medium
4A-113
75. The following data have been provided by Bicknese Corporation for the Circuit Prep
Department. The company uses the FIFO method in its process costing.
Required:
Determine the equivalent units of production for the Circuit Prep Department for August
using the FIFO method.
FIFO method:
AACSB: Analytic
Level: Medium
4A-114
76. Clasby Corporation uses the FIFO method in its process costing. The following data
concern the company's Assembly Department for the month of January.
Required:
Compute the costs per equivalent unit for the Assembly Department for January using the
FIFO method.
FIFO method:
AACSB: Analytic
Level: Easy
4A-115
77. Kortge Corporation uses the FIFO method in its process costing. The following data
concern the company's Mixing Department for the month of August.
Required:
Compute the cost per equivalent unit for materials and conversion for the Mixing Department
for August using the FIFO method.
FIFO method:
AACSB: Analytic
Level: Easy
4A-116
78. Dung Corporation uses the FIFO method in its process costing system. The following data
concern the company's Assembly Department for the month of August.
Required:
Determine the cost of ending work in process inventory and the cost of units transferred out of
the department during August using the FIFO method.
FIFO method:
4A-117
AACSB: Analytic
Level: Medium
4A-118
79. The following data has been provided by Palafox Inc., a company that uses the FIFO
method in its process costing system. The data concern the company's Shaping Department
for the month of March.
Required:
Determine the cost of ending work in process inventory and the cost of the units transferred
out of the department during March using the FIFO method.
FIFO method:
4A-119
AACSB: Analytic
Level: Medium
4A-120

Chap 04 A

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Chapter 04A - FIFO Method

LO8: FIFO assignment of costs (App 4A)

LO9: FIFO Cost reconciliation (App 4A)

LO7: FIFO cost per EU (App 4A)

LO5: WAC Cost reconciliation

Professional Exam Adapted

LO3: WAC cost per EU

18 M/C M x x New,5/27/97,Q7 E.N.

True / False Questions

Multiple Choice Questions

13. The computation of equivalent units under the FIFO method:

The equivalent units are:

What are the equivalent units for the month of May?

Nyman Company successfully switched to a lean production system at the beginning of

All materials are added at the beginning of the process.

Chapter 04A FIFO Method Answer Key

True / False Questions

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

Multiple Choice Questions

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

13. The computation of equivalent units under the FIFO method:

AACSB: Reflective Thinking

2,000 + 34,000 + X = 40,000

4,800 + 12,000 + X = 24,600

The equivalent units are:

What are the equivalent units for the month of May?

Nyman Company successfully switched to a lean production system at the beginning of

Note: The answer without any rounding error is $597,619.

Note: With no rounding, the answer is $449,250.

All materials are added at the beginning of the process.

2. $112,000 28,000 EUs = $4 per EU.

4. 5,000 80% $4 per EU = $16,000

$118,500 30,000 EUs = $3.95 per EU

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