Question

Pablo Company calculates the cost for an equivalent unit of production using process costing.

Data for June
Work-in-process inventory, June 1: 16,000 units
Direct materials: 100% complete	$	32,000
Conversion: 40% complete		12,800
Balance in work-in-process, June 1	$	44,800
Units started during June		39,200
Units completed and transferred out		39,200
Work-in-process inventory, June 30		16,000
Direct materials: 100% complete
Conversion: 80% complete
Costs incurred during June
Direct materials	$	90,160
Conversion costs
Direct labor		90,160
Applied overhead		121,520
Total conversion costs	$	211,680

Required: 1. Compute the cost per equivalent unit for both the weighted average and FIFO methods. (Round your answers to 3 decimal places.) Weighted Average Cost FIFO Cost per EU per EU Direct materials Conversion Total cost 0.000 $ 0.000

Answer 1

• Requirements asked

	Weighted average cost per EU	FIFO Cost per EU
Direct Material	$                            2.213	$                  2.300
Conversion cost	$                            4.317	$                  4.642
Total Cost	$                            6.530	$                  6.942

• Working: Weighted Average

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	39,200	100%	39,200	100%	39,200
Units of ENDING WIP	16,000	100%	16,000	80%	12,800
Equivalent Units of Production			55,200		52,000
COST per EUP			Material		Conversion
Cost of Beginning WIP			$          32,000.00		$                                  12,800.00
Cost incurred during the period			$          90,160.00		$                                211,680.00
Total Costs		Costs	$        122,160.00	Costs	$                               224,480.00
Equivalent units of production		EUP	55,200	EUP	52,000
Cost per EUP			$              2.21304		$                                      4.31692

• Working: FIFO method

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	16,000	100.0%	16,000	80.0%	12,800
Units STARTED & COMPLETED	23,200	100%	23,200	100%	23,200
Units of beginning WIP	16,000	0.00%	-	60%	9,600
Equivalent Units of Production			39,200		45,600
COST per EUP			Material		Conversion
Cost incurred this period			$          90,160.00		$                  211,680.00
Total Costs		Costs	$          90,160.00	Costs	$                  211,680.00
Equivalent units of production		EUP	39,200	EUP	45,600
Cost per EUP			$             2.30000		$                          4.6421