8-35

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day.

Beginning WIP inventory
Direct materials	$	992
Conversion costs		407
Current period costs
Direct materials		17,710
Conversion costs		12,702

Quantity information is obtained from the manufacturing records and includes the following.

Beginning inventory	900	units	(60% complete as to materials, 60% complete as to conversion)
Current period units started	4,900	units
Ending inventory	1,100	units	(40% complete as to materials, 20% complete as to conversion)

Required:

a. Compute the equivalent units for the materials and conversion cost calculations.

b. Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method.

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day.

Beginning WIP inventory
Direct materials	$	992
Conversion costs		407
Current period costs
Direct materials		17,710
Conversion costs		12,702

Quantity information is obtained from the manufacturing records and includes the following.

Beginning inventory	900	units	(60% complete as to materials, 60% complete as to conversion)
Current period units started	4,900	units
Ending inventory	1,100	units	(40% complete as to materials, 20% complete as to conversion)

Compute the cost of goods transferred out and the ending inventory using the FIFO method.