Krumbly Company uses the FIFO method in its process costing system. At the beginning of the month, Department Ds work in process inventory contained 2, 000 units. These units were fully complete with respect to materials and 40% complete with respect to conversion costs, with a total cost at that point of $3, 600. During the month, conversion costs amounted to $8 per equivalent unit. If all 2, 000 units are fully complete by the end of the month, their total cost by that time will be:

PROCESS COSTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Krumbly Company uses the FIFO method in its process costing system. At the beginning of the month, Department D’s work in process inventory contained 2, 000 units. These units were fully complete with respect to materials and 40% complete with respect to conversion costs, with a total cost at that point of $3, 600. During the month, conversion costs amounted to $8 per equivalent unit. If all 2, 000 units are fully complete by the end of the month, their total cost by that time will be:

A	$19, 600
B	$10, 000
C	$13, 200
D	$9, 000

Explanation:

Detailed explanation-1: -Galli Corporation uses the FIFO method in its process costing system. The Grinding Department started the month with 10, 000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs.

Detailed explanation-2: -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.

Detailed explanation-3: -When units in the beginning inventory are all completed and transferred at the same time. The correct answer is Option C. Option C-The absence of beginning inventory will result in the same amount of the cost of goods transferred (CGT) under FIFO to the weighted-average method.

Detailed explanation-4: -Since we are using FIFO method, we first include the entire beginning WIP in the cost of units transferred out and then include units started/added during the period.

There is 1 question to complete.

ECONOMICS

COST ACCOUNTING

PROCESS COSTING