Question

Nader, Inc., has the following information available:

	Costs from Beginning Inventory	Costs from Current Period
Direct materials	$2,300	$ 21,252
Conversion costs	6,200	150,536

At the beginning of the period, there were 500 units in process that were 40 percent complete as to conversion costs and 100 percent complete as to direct materials costs.

During the current period, 4,300 units were started and completed.

Ending inventory contained 320 units that were 80 percent complete as to conversion costs and 100 percent complete as to direct materials costs. (Assume that the company uses the FIFO costing method.)

Answer 1

Answer:

Direct materials	Conversion costs
Units to completed beginning inventory	0	300	=500*(1-40%)
Units started and completed	4300	4300
Ending work in Process inventory	320	256	=320*80%
Equivalent units	4620	4856
	Direct materials	Conversion costs	Total
Costs from current period	21252	150536
Divide by Equivalent units	4620	4856
Cost of completing a unit during current period	4.60	31.00	35.60
Cost of completing a unit during current period = $35.60