Question

Cure Sdn Bhd (CSB) is a biotech company based in Kedah. It makes a cancer-treatment drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. The following information for July 2018 is available.

REQUIRED:

(a)Calculate the cost per equivalent unit for direct materials and conversion costs based on First In-First Out (FIFO) method of process costing. Show all workings.

(b)CSB's management seeks to have a more consistent cost per equivalent unit. Explain which method of process costing should the company choose.