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 process	4,000	(40% complete)
Units started	?
Total units to account for	?
Units accounted for:
Units, ending work in process	8,000	(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 December

	Direct Materials	Conversion Costs	Transferred In
Units started and completed
Units to complete in BWIP:			blank
x %
Units in EWIP:
x %	blank	blank
x %
Total equivalent units

Feedback

The FIFO method excludes the equivalent output and costs in BWIP when the current-period unit cost is calculated. FIFO follows the process-costing principle. When calculating costs of goods transferred out, two categories of completed units are needed: Units completed from BWIP and Units started and completed.

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