COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A) In work-in-process at the beginning of the period times the percent of work necessary to complete the items, plus the number of units started and completed during the period, plus the number of units remaining in work-in-process at the end of the period times the percent of work done during the period.
|
|
|
B) In work-in-process at the beginning of the period, plus the number of units started during the period, plus the number of units remaining in work-in-process at the end of the period times the percent of work necessary to complete the items.
|
|
|
C) Started into process during the period, plus the number of units in work-in-process at the beginning of the period.
|
|
|
Transferred out during the period, plus the number of units remaining in work-in-process at the end of the period times the percent of work necessary to complete the items.
|
|
|
E) None of the above.
|
Detailed explanation-1: -when using the fifo method of process costing the total equivalent units of production for a given period of time is equal to the number of units. All tutors are evaluated by Course Hero as an expert in their subject area.
Detailed explanation-2: -The cost per equivalent unit under the FIFO method of process costing is equal to the cost of beginning work in process inventory plus the costs added during the period, all divided by the equivalent units of production for the period.
Detailed explanation-3: -FIFO stands for “First-In, First-Out”. It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The FIFO method assumes that the oldest products in a company’s inventory have been sold first. The costs paid for those oldest products are the ones used in the calculation.
Detailed explanation-4: -Under the FIFO method, we will calculate equivalent units for 3 things: Units completed from beginning work in process, units started and completed this period and units remaining in ending work in process.
Detailed explanation-5: -The first-in-first-out (FIFO) method keeps beginning inventory costs separate from current period costs and assumes that beginning inventory units are completed and transferred out before the units started during the current period are completed and transferred out.