Answer:
Using the FIFO cost method:
beginning WIP 34,600 units
materials $79,000 (100% complete)
conversion $48,200 (30% complete, 70% remaining = 24,220 EU)
units started 662,700
materials added $1,594,520
conversion costs added $566,356
ending WIP 24,100
100% complete for materials
40% complete for conversion = 9,640 EU
units completed and transferred out = 34,600 + 662,700 - 24,100 = 673,200
units started and completed = 662,700 - 34,600 - 24,100 = 604,000
total equivalent units for the month:
materials 662,700
conversion = 24,220 + 604,000 + 9,640 = 637,860
total cost per EU:
materials = $1,594,520 / 662,700 = $2.4061
conversion = $566,356 / 637,860 = $0.8879
total = $3.294
cost of ending WIP:
materials = 24,100 x $2.4061 = $57,987
conversion = 9,640 x $0.8879 = $8,559.36 ≈ $8,559
total = $66,546
cost of units transferred out = $79,000 + $48,200 + $1,594,520 + $566,356 - $66,546 = $2,221,530
total units transferred out = 673,200
production cost per unit = $2,221,530 / 673,200 = $3.30
