Question

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:

Units:
Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $43,000.
Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000.
Costs incurred in February - Conversion: $599,150.

Calculate the cost per equivalent unit of materials.

Answer 1

• Requirement:
  Cost per Equivalent unit of Material as per FIFO = $ 2.05 Answer
• Working for above answer

EUP - FIFO Method	Units	% Material	EUP Materials
Units of ENDING WIP	30,000	100.0%	30,000
Units STARTED & COMPLETED	110,000	100%	110,000
Units of beginning WIP	25,000	0.00%	-
Equivalent Units of Production			140,000
COST per EUP			Material
Cost incurred this period			$       287,000.00
Total Costs		Costs	$       287,000.00
Equivalent units of production		EUP	140,000
Cost per EUP			$             2.05 = Answer