Question

Pablo Company calculates the cost for an equivalent unit of production using process costing. $ 30,000 12,000 $ 42,000 37,000 37,000 15,000 Data for June Work-in-process inventory, June 1: 15,000 units Direct materials: 100% complete Conversion: 40% complete Balance in work-in-process, June 1 Units started during June Units completed and transferred out Work-in-process inventory, June 30 Direct materials: 100% complete Conversion: 80% complete Costs incurred during June Direct materials Conversion costs Direct labor Applied overhead Total conversion costs $ 81,400 81,400 111,000 $192,400 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 per EU FIFO Cost per EU Direct materials Conversion Total cost S 0.000 $ 0.000

Answer 1

Answer

• Requirement 1

	Weighted average cost per EU	FIFO Cost per EU
Direct Material	$                            2.142	$                  2.200
Conversion cost	$                            4.171	$                  4.474
Total Cost	$                            6.314	$                  6.674

• Working Weighted average

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	37,000	100%	37,000	100%	37,000
Units of ENDING WIP	15,000	100%	15,000	80%	12,000
Equivalent Units of Production			52,000		49,000
COST per EUP			Material		Conversion
Cost of Beginning WIP			$          30,000.00		$                                  12,000.00
Cost incurred during the period			$          81,400.00		$                                192,400.00
Total Costs		Costs	$        111,400.00	Costs	$                                204,400.00
Equivalent units of production		EUP	52,000	EUP	49,000
Cost per EUP			$              2.14231		$                                      4.17143

• Working for FIFO

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	15,000	100.0%	15,000	80.0%	12,000
Units STARTED & COMPLETED	22,000	100%	22,000	100%	22,000
Units of beginning WIP	15,000	0.00%	-	60%	9,000
Equivalent Units of Production			37,000		43,000
COST per EUP			Material		Conversion
Cost incurred this period			$          81,400.00		$                  192,400.00
Total Costs		Costs	$          81,400.00	Costs	$                  192,400.00
Equivalent units of production		EUP	37,000	EUP	43,000
Cost per EUP			$             2.20000		$                          4.4744