Answer:
Cost per equivalent unit Materials = $ 2.82
Cost per equivalent unit Conversion = $2.65
Explanation:
Richards Corporation
1) We first calculate the fifo equivalent units .
FIFO Equivalent units can be calculated by the following.
Particulars Units % of Completion Equivalent Units
Mat. Con. Costs Materials C. Costs
Transferred out, 366,000 100 100 366,000 366,000
Ending inventory, 39,000 30 15 11700 5850
Total Weighted Equivalent Units 377,700 371,850
Less
<u> Beginning Inventory: 98,000, 80% 20% 78,400 18000</u>
<u>FIFO Equivalent Units 299,300 353,850 </u>
2) We calculate the total costs
Direct Materials Conversion
Costs in beginning Work in Process -$55,200 $97,700
<u>Costs incurred in October - $844,050 $937,300. </u>
Total Cost $ 899250 1035,000
<u />
<u>3) In FIFO The cost per unit is based only on the current costs and current period unit productions.</u>
Materials = $844050/299300= $2.82
Conversion = 937,300 / 353,850 = 2.6488= $2.65
