Overboard Corporation uses the FIFO method in its process costing system.In the Cutting Department in June,units were 80% complete with respect to conversion in the beginning work in process inventory and 25% complete with respect to conversion in the ending work in process inventory.Other data for the department for June follow:
The cost per equivalent unit for conversion cost is closest to:
A) $1.75
B) $1.51
C) $1.45
D) $1.98

Question

Overboard Corporation uses the FIFO method in its process costing system.In the Cutting Department in June,units were 80% complete with respect to conversion in the beginning work in process inventory and 25% complete with respect to conversion in the ending work in process inventory.Other data for the department for June follow:
 The cost per equivalent unit for conversion cost is closest to:
A) $1.75 
B) $1.51 
C) $1.45 
D) $1.98

Quizplus · Accepted Answer

FIFO method
Units started and completed = Units completed during the period - Units in beginning inventory
Units started and completed = 130,000 - 20,000 = 110,000
Units started and completed = Units started into production during the period - Units in ending inventory
110,000 = 150,000 - Units in ending inventory
Units in ending inventory = 150,000 - 110,000 = 40,000
FIFO method equivalent units of production
 11ea7761_18bf_afde_81a5_4f014ba5b96a_TB2580_00 FIFO method cost per equivalent unit
 11ea7761_18bf_afdf_81a5_eff6d206e74b_TB2580_00

Overboard Corporation Uses the FIFO Method in Its Process Costing