The following information applies to questions 3 through 5:

Reutter Company makes a product in two sequential processesEtching and Wiring. Reutter uses the FIFO method to calculate per unit costs. During July, the following data was collected for the Etching department:

Number Materials Labor and Overhead

of Units Percent Completed Percent Completed

Work in process inventory, July 1 60,000 60% 30%

Started into production during July 510,000

Completed and transferred out 500,000

Work in process inventory, July 31 70,000 80% 40%

Costs for July: Materials Labor and Overhead

Work in process, July 1 $ 27,000 $ 13,000

Added during the month $468,000 $357,000

1. Assuming that the FIFO method is used, what is the materials cost per unit (round your answer, if

necessary, to the nearest cent)?

a. $.84 c. $.75

b. $.90 d. $1.01

2. Assuming that the FIFO method is used, what is the conversion cost per unit (round your answer, if

necessary, to the nearest cent)?

a. $.73 c. $.74

b. $.68 d. $.70

3. Ignore your answers to #3 and #4. Assume that the materials cost per unit is $.85 and the conversion cost

per unit is $.75, using the FIFO method. Which of the following is the correct journal entry to transfer the

cost of completed units from the Etching department to the Wiring department using the FIFO method?

a. debit WIP-Wiring $795,900; credit WIP-Etching $795,900

b. debit WIP-Etching $795,900; credit WIP-Wiring $795,900

c. debit WIP-Wiring $755,900; credit WIP-Etching $755,900

d. debit WIP-Etching $755,900; credit WIP-Wiring $755,900