Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day:

Beginning WIP inventory
Direct materials	$ 962
Conversion costs	497
Current period costs
Direct materials	19,320
Conversion costs	14,994

Quantity information is obtained from the manufacturing records and includes the following:

Beginning inventory	600 units	(70% complete as to materials, 55% complete as to conversion)
Current period units started	5,500 units
Ending inventory	1,700 units	(50% complete as to materials, 20% complete as to conversion)

Required: FIFO Method

(1) Compute the equivalent units for the materials and conversion cost calculations.

Equivalent units for materials	----------------
Equivalent units for conversion costs	-----------------

(2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.)

	Cost Per Equivalent Unit
Direct materials	---------------
Conversion costs	----------------

*ANSWER needs to be filled in the space that is marked "-------------"

Answer 1

1) compute equivalent units (under FIFO METHOD)

Particular	material	conversion
Unit's started and completed (note below) 4400units
Beginning inventory	(600×30%) 180	(600×45%) 270
Unit's introduced in the Period	(3800×100%) 3800	(3800×100%) 3800
Ending inventory	(1700×50) 850	(1700×20%) 340
Total equivalent units	4830	4410

​​​​​​ Unit's started and completed =beginning balance+unit during the month - ending inventory

= 600units +5500units - 1700units

= 4400 units

2) compute cost per Equivalent units under fifo method

Particular	material	conversion
(a)Cost incurred during the month	$19320	$14994
(b)Tota equivalent units	4830	4410
cost per Equivalent unit (a/b)	$4	$3.4

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