1. When computing the FIFO cost per unit for materials or conversion, the units in beginning work in process (multiplied by the percent complete) should be subtracted in the denominator.

a. true b. false

2. In computing unit cost figures for materials and conversion, the units in the ending work in process (multiplied by the percent complete) should not be added in the denominator when the FIFO method is used.

a. true b. false

The following information applies to questions 3 through 5:

Johnson Company makes a product in two sequential processesCutting and Sewing. Johnson uses the FIFO method to calculate per unit costs. During July, the following data was collected for the Cutting department:

Number Materials Labor and Overhead

of Units Percent Completed Percent Completed

Work in process inventory, July 1 5,000 100% 40%

Started into production during July 180,000

Completed and transferred out 175,000

Work in process inventory, July 31 10,000 100% 30%

Costs for July: Materials Labor and Overhead

Work in process, July 1 $ 1,500 $ 4,000

Added during the month $ 54,000 $352,000

3. Assuming that the FIFO method is used, what is the materials cost per unit (round your answer, if

necessary, to the nearest cent)?

a. $.29 c. $.30

b. $.31 d. $.38

4. Assuming that the FIFO method is used, what is the conversion cost per unit (round your answer, if

necessary, to the nearest cent)?

a. $2.02 c. $1.98

b. $1.85 d. $2.00

5. Ignore your answers to #3 and #4. Assume that the materials cost per unit is $.35 and the conversion cost

per unit is $2.10, using the FIFO method. Which of the following is the correct journal entry to transfer the

cost of completed units from the Cutting department to the Sewing department using the FIFO method?

a. debit WIP-Sewing $428,300; credit WIP-Cutting $428,300

b. debit WIP-Cutting $422,800; credit WIP-Sewing $422,800

c. debit WIP-Sewing $422,800; credit WIP-Cutting $422,800

d. debit WIP-Cutting $428,300; credit WIP-Sewing $428,300

6. All production costs have been steadily rising at Donner Company for several periods. In this environment, Donner Companys cost of ending Work In Process inventory using the FIFO method would be:

a. the same as that computed under the weighted average method.

b. higher than that computed under the weighted average method.

c. lower than that computed under the weighted average method.