Question

The debts to work in Process Assembly Department for May, together with data concerning production are as follows: May 1, work in process: Materials cost, 3,000 units $8,500 Conversion costs, 3,000 units, 50% completed 5,300 Materials added during May, 10,000 units 26,700 Conversion costs during May 31,200 Goods finished during May, 11,500 units May 31 work in process, 1.500 units, 50% completed All direct materials are placed in process at the beginning of the process, and the first in first-out method is used to cost inventories. The materials cost per equivalent unit for May is O $2.32 d. 52.67

Answer 1

Correct answer-----------(d) $2.67

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	3,000	100%	50%	0%	50%
Units introduced	10,000
Total units to be accounted for	13,000
Completed and Transferred unit	11,500	0%	0%	100%	100%
Ending WIP	1,500	0%	0%	100%	50%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	3,000	0%	-	50%	1,500
From units started/Introduced	8,500	100%	8,500	100%	8,500
Total	11,500		8,500		10,000
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	1,500	100%	1,500	50%	750
Total EUP	13,000		10,000		10,750

.

STEP 3
Cost per Equivalent Units
	Material
Cost incurred in Current Period	$ 26,700
Total Equivalent Units	10,000
Cost per Equivalent Units	$ 2.67