Company X uses process
costing and has 2 departments. Direct materials are added at the start of the
process and conversion costs are added evenly during the process. The company
presented the following information regarding department 2 for June:

Based on the information
above, which of the following is TRUE?

Question

Company X uses process
costing and has 2 departments. Direct materials are added at the start of the
process and conversion costs are added evenly during the process. The company
presented the following information regarding department 2 for June: 
   
 Based on the information
above, which of the following is TRUE?

Answer

There are 2 correct answers

Answer

If only the full amount of
inventory completed in June is sold in the next month, Company X will present
higher net income if FIFO method is applied

Answer

The manufacturing costs (DM
and CC) are decreasing

Answer

If the full amount of
inventory completed in June is sold, Company X will present lower inventory at
the year end, if FIFO method is chosen

Answer

None of the others

Crowdly

Company X uses process costing and has 2 departments. Direct materials are added...

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