Fuji Corp. manufactures and sells apple pie filling that it sells to its vendors in aluminum containers. Fuji just completed their first month of operations, and they are excited to be planning for their second month. Fuji believes that reviewing their process costing results for their first month will be a crucial piece in preparing for their second month. Fuji would like to utilize the First-In, First-Out (FIFO) method as they believe it will produce the most accurate results. Their costing information for their first month is as follows:
Based upon the information given, what is the cost per equivalent unit for the Direct Material(s) using the FIFO method?

Question

Fuji Corp. manufactures and sells apple pie filling that it sells to its vendors in aluminum containers. Fuji just completed their first month of operations, and they are excited to be planning for their second month. Fuji believes that reviewing their process costing results for their first month will be a crucial piece in preparing for their second month. Fuji would like to utilize the First-In, First-Out (FIFO) method as they believe it will produce the most accurate results. Their costing information for their first month is as follows:
 Based upon the information given, what is the cost per equivalent unit for the Direct Material(s) using the FIFO method?

Quizplus · Accepted Answer

This question requires identification of the fact that Fuji has two Direct Materials: aluminum and pie filling. This question is using FIFO, so do not include the beginning WIP inventory in the calculation of costs to be included. Start with aluminum: $42,900/13,422 containers = $3.20 per container. Next, move on to pie filling: $33,306/11,323 grams = $2.94 per gram.

Fuji Corp Manufactures and Sells Apple Pie Filling That It Sells