True and False questions Indicate True or False Question True False Inventory in finished goods includes direct material, direct labour, factory overhead and corporate overhead. Units transferred out of Box C will have material, labour and factory overhead in the transfer cost. Equivalent units of production are the portion of whole units that are complete with respect to either materials or conversion (direct labour and factory overhead) costs. Process costing is used for unique production jobs. Process costing and job costing assign the same costs to ending work in process inventory. FIFO costing includes beginning inventory costs in the equivalent per unit cost calculation. If material for 2000 products was added to Work in Process but conversion costs are 75% complete at month end, the equivalent units for allocating conversion costs incurred in the month are A = 2,000 or B = 1,500 units. Which is correct? A B The Finished Goods in Box D received $50,000 of costs (Transferred in). Opening inventory was $20,000 and ending inventory was $10,000. Transferred out must be A = $50,000 or B = $60,000. Which is correct? A B