Question

Use this information about Penny, Inc. to answer the questions that follow.

Penny, Inc., employs a process cost system and uses the FIFO cost flow method. Direct materials are added at the beginning of the process. Here is information about the July activities:

On July 1:

Beginning inventories 850 units, 60% complete

Direct materials cost $5,000

Conversion costs $4,000

During July:

Number of units started 15,000

Direct materials added $155,000

Conversion costs added $83,520

On July 31:

Ending inventories 1,600 units, 40% complete

The number of units started and completed in July was

a. 14,250

b. 15,000

c. 13,400

d. 15,740

Answer

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