Guthrie Corporation The following information is available for Guthrie Corporation for the current year:
All materials are added at the start of production.
Refer to Guthrie Corporation.Using FIFO,what is the cost per equivalent unit for material?

Question

Guthrie Corporation The following information is available for Guthrie Corporation for the current year:
 All materials are added at the start of production.
Refer to Guthrie Corporation.Using FIFO,what is the cost per equivalent unit for material?

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for materials using FIFO, we need to use the following formula:

Cost per equivalent unit = (Beginning inventory cost + Cost of materials added during the current period) ÷ Equivalent units of production

- Beginning inventory cost = $0 (since all materials are added at the start of production)
- Cost of materials added during the current period = $96,000
- Equivalent units of production = 56,000 + (14,000 x 50% completion) = 63,000

Plugging in the numbers, we get:

Cost per equivalent unit = ($0 + $96,000) ÷ 63,000
Cost per equivalent unit = $1.52

Therefore, the closest answer choice is C) $1.71.

Guthrie Corporation the Following Information Is Available for Guthrie Corporation