Question

Costs from Beginning Inventory Costs from Current Period

Direct materials $5,100 $25,200
Conversion costs $5,300 143,700

At the beginning of the period, there were 400 units in process that were 45% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 5,200 units were started and completed. Ending inventory contained 300 units that were 35% complete as to conversion costs and 100% complete as to materials costs. Assume that the company uses the FIFO cost flow method. The cost of completing a unit during the current period was:________

Answer 1

$30.59

Step-by-step explanation:

Note that the FIFO method is used for this question

Equivalent Units

Materials = 5,200 x 100 % + 300 x 100 % = 5,500

Conversion Costs = 400 x 55 % + 5,200 x 100 % + 300 x 35 % = 5,525

Total Costs

Materials = $25,200

Conversion Costs = $143,700

Cost per Equivalent unit

Materials = $25,200/5,500 = $4.58

Conversion Costs = $143,700/5,525 = $26.01

Total Cost = $4.58 + $26.01 = $30.59

Conclusion

The cost of completing a unit during the current period was $30.59