Artemis Inc. manufactures organic cotton dishcloths that it sells in an online store. Their products begin in the cutting department before moving to the sewing department where they are completed. Their accounting department has gathered the following costing information for the month of September:
The following represents the equivalent units of production for the month of September:
Using the FIFO method, calculate the equivalent cost per unit for Transferred-In (TI), Direct Materials (DM), and Conversion Costs (CC) during the month of September. (Round answers to the two decimal places.)

Question

Artemis Inc. manufactures organic cotton dishcloths that it sells in an online store. Their products begin in the cutting department before moving to the sewing department where they are completed. Their accounting department has gathered the following costing information for the month of September:
 The following represents the equivalent units of production for the month of September:
 Using the FIFO method, calculate the equivalent cost per unit for Transferred-In (TI), Direct Materials (DM), and Conversion Costs (CC) during the month of September. (Round answers to the two decimal places.)

Quizplus · Accepted Answer

First, determine the total equivalent costs for each cost category. For Transferred-In, Direct Materials, and Conversion Costs, only use the costs added during the period and disregard the beginning WIP Inventory costs. To calculate the equivalent cost per unit, divide the costs added to WIP Inventory by the total equivalent units of production. Transferred-In: $11,700/ 5,391 units = $2.17 per unit, Direct Materials: $13,008/5,391 units = $2.41 per unit, and Conversion Costs: $16,772/ 5,411 units = $3.10 per unit.