Answer:
$5.275 & $5.40
Explanation:
According to the scenario, computation of the given data are as follows:
Weighted Average Method :
Units Physical Direct Conversion
Completed & transferred 70,000 70,000 70,000
Ending WIP 30,000 30,000 24,000
( 30,000 × 80%)
Equivalent production Unit 100,000 100,000 94,000
So, Cost per equivalent unit under weighted average method can be calculated as:
Direct material Conversion Total cost
$1.825 $3.45 $5.275
(60,000 + 122,500) (25000+299300)
= (182,500 ÷ 100.000) =(324300 ÷ 94,000)
FIFO Method
Units Physical Direct Conversion
Beginning WIP 30,000 0 18,000
(30,000 × 0%) (30,000 × 60%)
Started & completed 40,000 40,000 40,000
Ending WIP 30,000 30,000 24,000
(30,000 × 80%)
Equivalent production Unit 100,000 70,000 82,000
So, Cost per equivalent unit under FIFO method can be calculated as:
Direct material Conversion Total cost
$1.75 $3.65 $5.40
(122,500 ÷ 70,000) (299,300 ÷ 82,000)
