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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.
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 | $ | 980 | |
Conversion costs | 287 | ||
Current period costs | |||
Direct materials | 11,285 | ||
Conversion costs | 7,287 | ||
Quantity information is obtained from the manufacturing records and includes the following.
Beginning inventory | 500 | units | (60% complete as to materials, 56% complete as to conversion) |
Current period units started | 4,100 | units | |
Ending inventory | 1,000 | units | (40% complete as to materials, 15% 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.
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