Sparky Corporation uses the FIFO method of process costing. The following inform

Question

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department Units Beginning inventory: 27,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 112,000. Units completed and transferred out: 139,000. Ending inventory: 31,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - DireckMaterials: $45,000. Costs in beginning Work in Process - Conversion: $50,850. Costs incurred in February - Direct Materials: $311,160. Costs incurred in February - Conversion: $601,150, Calculate the cost per equivalent unit of conversion. Multiple Choice $5.38

Explanation / Answer

Cost production report Flow Of Units Physical Units Direct Material A Conversion cost Transferred out from units of opening WIP 27000 Units started and completed this period 112000 Completed and transferred out (b) 139000 Ending work in progress inventory© 31000 Total units to be accounted for (f)      170000 Calculation of equivalent units Units in Beginning WIP n 27000 27000 % of completion of Beginning WIP in last period    100% 55% % of completion of Beginning WIP completed in current period m 0% 45% Equivalents units of Beginning Wip A (n*m) 0 12150 Units started and completed B 112000 112000 112000 Units of Ending WIP   31000 31000 31000 % completion 100% 100% 30% Equivalent units in ending WIP E 31000 31000 9300 Total Equivalent units A+B+E 143000 133450 Cost per equivalent units Direct Material A Conversion cost Total Cost per equivalent units Cost during the period   $311,160 601150 $912,310 Total equivalent units 143000 133450 Cost per equivalent units   d $2.18 $4.50 $6.68 Ans $4.5 Option e

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