Gunnison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December shown at the top of the following page.

Required:

1. Calculate the unit cost for December, using the FIFO method.

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

3. What if you were asked for the unit cost from the month of November? Calculate November’s unit cost and explain why this might be of interest to management.LO1

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Units started and completed Add: Units in beginning work in process X Percentage complete: Direct Materials Conversion Costs 40,000 40,000 5,000 x 0% direct materials 5,000 x 50% conversion costs 2,500 Add: Units in ending work in process X Percentage complete: 10,000 x 100% direct materials 10,000 10,000 x 35% conversion costs 3,500 Equivalent units of output 50,000 46,000 Costs: Work in process, December 1:1 Direct materials Conversion costs Total work in process Current costs: Direct materials Conversion costs Total current costs $ 35,000 10,000 $ 45,000 $400,000 184,000 $584,000