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: 28,000 units, 100% complete as to materials and 60% complete as to conversion.
Units started and completed: 113,000.
Units completed and transferred out: 141,000.
Ending Inventory: 31,500 units, 100% complete as to materials and 25% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $46,000.
Costs in beginning Work in Process - Conversion: $51,850.
Costs incurred in February - Direct Materials: $316,730.
Costs incurred in February - Conversion: $602,150.

Calculate the cost per equivalent unit of conversion.

Multiple Choice

$5.41

$3.63

$2.84

$3.87

$4.56

Explanation / Answer

E. $4.56

Equivalent unit = (28,000 * 40%) + (113,000 * 100%) + (31,500 * 25%) = 132,075 units

Cost per equivalent unit of conversion cost = $602,150 / 132,075 = $4.56

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.