Question

Layla Company began making mascara in November 2018 using a single-step process. Layla incurred $42,000 for materials and $48,640 for conversion during the month. There were 21,000 cases of mascara started in November and 3,000 cases unfinished (40 percent complete) at the end of the period. All materials were added at the beginning of the production process. What is the unit cost for materials for Layla using the FIFO method?

Answer 1

The unit cost for materials for Layla Company using the FIFO method is calculated by dividing the total cost of materials ($42,000) by the total number of cases started (21,000), resulting in a cost of $2.00 per case of mascara.

Step-by-step explanation:

The student's question concerns the calculation of unit cost for materials in a single-step production process using the First-In, First-Out (FIFO) inventory costing method. Since all materials are added at the beginning of the production process and we have the total cost of materials ($42,000) and the number of cases started (21,000 cases), we can calculate the unit cost.

To determine the unit cost for materials, you would simply divide the total cost of materials ($42,000) by the total number of cases started (21,000 cases). This gives us a unit material cost of $2.00 per case. The fact that there are unfinished goods at the end of the period does not affect the material cost per unit because, under FIFO, the costs are allocated to the units started first, and we are told that materials are added at the beginning of the process.

Therefore, the unit cost for materials for Layla Company using the FIFO method is $2.00 per case.

Answer 2

The unit cost for materials for Layla using the FIFO method is $2.

Step-by-step explanation:

Physical unit % EUP-material

Units started and completed 18000 100% 18000

Ending work in process 3000 100% 3000

Total 21000 21000

Unit cost = 42000/21000

= $2 per unit

Therefore, The unit cost for materials for Layla using the FIFO method is $2.