What is the equivalent unit cost for the conversion costs assuming Kimbeth uses first-in,first-out (FIFO)process costing?

Question

Quizplus · Accepted Answer

Using FIFO process costing, we assume that the costs of the first units produced are the costs that are transferred out first. Based on the information provided, the total conversion costs incurred during the period were $80,500, and 13,800 units were completed and transferred out. Therefore, the equivalent unit cost for conversion costs is:

Equivalent units of conversion costs = Total conversion costs / Equivalent units produced
Equivalent units of conversion costs = $80,500 / (13,800 units completed + (2,000 * 75%)) = $80,500 / 14,300 = $5.62 per unit

Therefore, the answer is B) $5.83, which is the closest option.

What Is the Equivalent Unit Cost for the Conversion Costs