CMA Study Group

Exam 1 Additional Practice Question

  • 1.  Exam 1 Additional Practice Question

    Posted 20 days ago
    Hi, I am currently studying to hopefully take Part 1 in September and need a bit of help with the following question, the answer is D but there is no explanation.

    A company began the month with 10,000 units in work-in-process inventory that were 60%
    complete. During the month, the company transferred 120,000 units to finished goods. At the
    end of the month, 20,000 units were in work-in-process inventory that were 20% complete.
    Using the first-in, first out (FIFO) method, the equivalent units of production during the month
    equal
    a. 130,000.
    b. 128,000.
    c. 122,000.
    d. 118,000

    TIA

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    Carla Loera
    Student
    Laredo TX
    United States
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  • 2.  RE: Exam 1 Additional Practice Question

    Posted 19 days ago
    ​Hi Carla,

    A picture is worth a thousand words. I drew a picture to explain it, assume conversion costs are incurred evenly throughout production.


    Under FIFO, The equivalent units used to assign conversion costs = the sum of the work done on the beginning WIP inventory+units started
    and completed in the current period+the ending WIP inventory= 10,000*40%+(120,000-10,000)+20,000*20%=118,000


    Regards,
    Christine

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    Regards,
    Christine Ye
    Manager
    China
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  • 3.  RE: Exam 1 Additional Practice Question

    Posted 19 days ago
    Thank you so much for your help!

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    Carla Loera
    Student
    Laredo TX
    United States
    ------------------------------