Overhill 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)$1.48
B)$1.50
C)$1.16
D)$1.82

Question

Overhill 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)$1.48 
B)$1.50 
C)$1.16 
D)$1.82

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
 11eaa3fe_30d0_eaaf_908b_074534bac49f_TB2461_00 FIFO method cost per equivalent unit
 11eaa3fe_30d0_eab0_908b_c398eef49a6e_TB2461_00

Overhill Corporation Uses the FIFO Method in Its Process Costing