Mehta Company Co. uses a FIFO process costing system. The company had 5, 000 units that were 60 percent complete as to conversion costs at the beginning of the month. The company started 22, 000 units this period and had 7, 000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process?

PROCESS COSTING

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

A	18000
B	22000
C	25000
D	27000

Explanation:

Detailed explanation-1: -To calculate FIFO (First-In, First Out) determine the cost of your oldest inventory and multiply that cost by the amount of inventory sold, whereas to calculate LIFO (Last-in, First-Out) determine the cost of your most recent inventory and multiply it by the amount of inventory sold.

Detailed explanation-2: -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.

Detailed explanation-3: -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.

There is 1 question to complete.

ECONOMICS

COST ACCOUNTING

PROCESS COSTING