FIFO Method, Equivalent Units, Unit Cost, Multiple Departments

Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments.

The second department (Polishing) had the following physical flow schedule for December:

Units to account for:Units, beginning work in process4,000(40% complete)Units started?Total units to account for?Units accounted for:Units, ending work in process8,000(50% complete)Units completed?Units accounted for?

Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $50,000; and transferred in, $40,000.

Assume the company uses the FIFO method.

Required:

1-a.Prepare a schedule of equivalent units. Enter percentages as whole numbers.

Fordman Company

Schedule of Equivalent Units

For the month of DecemberDirect MaterialsConversion CostsTransferred In

Units to complete in BWIP:x%Units in EWIP:x%x%

1-b.Compute the unit cost for the month of December. Round intermediate calculations and your final answer to the nearest cent.

$per equivalent unit