Question

Carmelita Inc. has the following information available: Costs from Beginning Inventory Costs from Current Period Direct materials $4,400 $22,700 Conversion costs 5,400 149,900 At the beginning of the period, there were 500 units in process that were 41% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,600 units were started and completed. Ending inventory contained 300 units that were 29% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. The cost of completing a unit (rounded to the nearest cent) during the current period was

Answer 1

Solution :

Carmelita Inc.
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	500
Units started this period	4600
Total unit to be accounted for	5100
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 59%	500	0	295
Started and completed currently	4300	4300	4300
Transferred to finished goods	4800	4300	4595
Units in ending WIP Material - 100% Conversion - 29%	300	300	87
Total units accounted for	5100	4600	4682

Carmelita Inc.
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$172,600.00	$22,700.00	$149,900.00
Equivalent units		4600	4682
Cost per equivalent unit		$4.93	$32.02

Cost of completing a unit during the current period = $4.93 + $32.02 = $36.95 per unit