Reid Corporation uses a process costing system in which units go through several departments.In the Cutting Department for June,units in the beginning work in process inventory were 80% complete with respect to conversion costs.Units in the ending work in process inventory were 25% complete with respect to conversion costs.Other data for the department for June are as follows: Assuming that the company uses the FIFO cost method,the cost per equivalent unit for conversion costs for June is closest to:
A)$1.80
B)$1.40
C)$1.64
D)$1.35

Question

Reid Corporation uses a process costing system in which units go through several departments.In the Cutting Department for June,units in the beginning work in process inventory were 80% complete with respect to conversion costs.Units in the ending work in process inventory were 25% complete with respect to conversion costs.Other data for the department for June are as follows:  Assuming that the company uses the FIFO cost method,the cost per equivalent unit for conversion costs for June is closest to:
A)$1.80 
B)$1.40 
C)$1.64 
D)$1.35

Quizplus · Accepted Answer

Units in beginning work in process inventory + Units started into production or transferred in = Units in ending work in process inventory + Units completed and transferred out
15,000 + 145,000 = Units in ending work in process inventory + 130,000
Units in ending work in process inventory = 15,000 + 145,000 F1F1F1S1F1F1F10 130,000 = 30,000
FIFO method equivalent units of production
 11eaa3fe_30dd_6dee_908b_299bfa1f6e25_TB2461_00 FIFO method cost per equivalent unit
 11eaa3fe_30dd_6def_908b_17898c0304dd_TB2461_00

Reid Corporation Uses a Process Costing System in Which Units