If a department that applies FIFO process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to conversion, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. A. TRUEB. FALSE

Question

Clay Blankenship

Business

24 November, 06:48

If a department that applies FIFO process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to conversion, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. A. TRUEB. FALSE

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Answers (1)

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Katelyn Daugherty · Answer 1

B) False

Explanation:

The department had 50,000 units which were:

25% complete with respect to direct materials (equivalent to 12,500 units), to finish them it must add 37,500 equivalent units of direct materials. 40% complete with respect to conversion (equivalent to 20,000 units), to finish them it must add 30,000 equivalent units of direct labor.