Inky Pens Inc. is a factory that produces blue glitter ink and sells it to vendors in small glass vials. Inky has collected the following data for April, the most recent month of production:
They also compiled the following cost data for April:
The management of Inky is asking their accountant, Susan to provide information pertaining to both the First-In, First-Out (FIFO) method and the Weighted-Average method. Susan has worked for Inky for a few months, and she is looking forward to becoming involved in this process. With all of this information in mind, please answer the following questions. (Round units to whole number and cost to two decimal places.)
a. What is the equivalent cost per unit for Glass, Ink, and Conversion Costs under FIFO?
b. What is the equivalent cost per unit for Glass, Ink, and Conversion Costs under Weighted-Average?
c. Inky has debated adding a new line of pink glitter ink, and wants Susan to provide guidance as to which method would be best. Would this answer vary if Inky was producing another office supply product other than glitter ink such as paperclips?

Question

Inky Pens Inc. is a factory that produces blue glitter ink and sells it to vendors in small glass vials. Inky has collected the following data for April, the most recent month of production:
  They also compiled the following cost data for April:
  The management of Inky is asking their accountant, Susan to provide information pertaining to both the First-In, First-Out (FIFO) method and the Weighted-Average method. Susan has worked for Inky for a few months, and she is looking forward to becoming involved in this process. With all of this information in mind, please answer the following questions. (Round units to whole number and cost to two decimal places.)
a. What is the equivalent cost per unit for Glass, Ink, and Conversion Costs under FIFO?
b. What is the equivalent cost per unit for Glass, Ink, and Conversion Costs under Weighted-Average?
c. Inky has debated adding a new line of pink glitter ink, and wants Susan to provide guidance as to which method would be best. Would this answer vary if Inky was producing another office supply product other than glitter ink such as paperclips?

Quizplus · Accepted Answer

The Answer of Inky Pens Inc. is a factory that produces blue glitter ink and sells it to vendors in small glass vials. Inky has collected the following data for April, the most recent month of production:
  They also compiled the following cost data for April:
  The management of Inky is asking their accountant, Susan to provide information pertaining to both the First-In, First-Out (FIFO) method and the Weighted-Average method. Susan has worked for Inky for a few months, and she is looking forward to becoming involved in this process. With all of this information in mind, please answer the following questions. (Round units to whole number and cost to two decimal places.)
a. What is the equivalent cost per unit for Glass, Ink, and Conversion Costs under FIFO?
b. What is the equivalent cost per unit for Glass, Ink, and Conversion Costs under Weighted-Average?
c. Inky has debated adding a new line of pink glitter ink, and wants Susan to provide guidance as to which method would be best. Would this answer vary if Inky was producing another office supply product other than glitter ink such as paperclips?