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Puri Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work in process inventory:
Units in beginning work in process inventory 400
Materials costs $4,800
Conversion costs $3,300
Percent complete with respect to materials 85 %
Percent complete with respect to conversion 45 %
Units started into production during the month 5,800
Units transferred to the next department during
the month 5,100
Materials costs added during the month $69,500
Conversion costs added during the month $82,300
Ending work in process inventory:
Units in ending work in process inventory 1,100
Percent complete with respect to materials 55 %
Percent complete with respect to conversion 45 %
The cost per equivalent unit for conversion costs for the first department for the month is closest to:_______.

Respuesta :

abiolataiwo2015

Answer:

$15.20

Explanation:

Computation for the cost per equivalent unit for conversion costs for the first department

First step

FIFO METHOD

IN

Beginning WIP 400

Units Introduced 5800

Total 6,200

OUT

Beginning WIP Completed 400

Production started and Completed 4,700

(5800-1100)

Ending WIP 1100

Total 6,200

Equivalent Units

Materials

% Complete Equivalent unit

Beg. WIP Completed 400 15% 60

(15%*400=60)

Production started and Completed 4,700 (5800-1100) 100% 4,700

(100%*4,700=4,700)

Ending WIP 1,100 55% 605

(55%*1,100=605)

TOTAL 5,365

(60+4700+605)

Equivalent Units

Conversion

% Complete Equivalent unit

Beg. WIP Completed 400 55% 220

(55%*400=220)

Production started and Completed 4,700 (5800-1100) 100% 4,700

(100%*4,700=4,700)

Ending WIP 1,100 45% 495

(45%*1,100=495)

TOTAL 5,415

(220+4700+495)

Second step is to Compute the cost per equivalent unit for conversion costs

Cost Statement

Equivalents unit (A) Current period cost incurred (B) Cost per unit (B/A)

Material 5,365(a) $69,500(b) $12.95

Conversion 5,415(a) $82,300(b) $15.20

Therefore the Conversion cost for the first department for the month closest to $15.20

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