Question

Fine Fans mass-produces small electric fans in Taiwan for home use. All direct materials are added at the beginning of production, and conversion costs are incurred evenly throughout production. The following production information is for the month of October (currency is New Taiwan dollars):

			Physical
			Units
Started in October				100,000
Completed in October				94,000
Ending WIP (60% complete)				15,000
Beginning WIP (20% complete)				9,000
			Costs
Beginning work in process costs
	Direct materials		NT$	18,000
	Conversion costs			36,000
Costs added this period
	Direct materials			100,000
	Conversion costs			200,000

Calculate the equivalent cost per unit using the FIFO method. (Round all entries to 2 decimal places, e.g. 15.25.)

Direct materials per equivalent unit		$
Conversion costs per equivalent unit
Total cost per equivalent unit		$

Answer 1

• Requirement

Direct materials per equivalent unit	$ 1.00
Conversion costs per equivalent unit	$ 1.98
Total cost per equivalent unit	$ 2.98

--Working

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	15,000	100.0%	15,000	60.0%	9,000
Units STARTED & COMPLETED	85,000	100%	85,000	100%	85,000
Units of beginning WIP	9,000	0.00%	-	80%	7,200
Equivalent Units of Production			100,000		101,200
COST per EUP			Material		Conversion
Cost incurred this period			$       100,000.00		$                  200,000.00
Total Costs		Costs	$       100,000.00	Costs	$                  200,000.00
Equivalent units of production		EUP	100,000	EUP	101,200
Cost per EUP			$             1.00000		$                          1.9763