Layla Company began making mascara in November 2018 using a single-step process. Layla incurred $42,000 for materials and $48,640 for conversion during the month. There were 21,000 cases of mascara started in November and 3,000 cases unfinished (40 percent complete) at the end of the period. All materials were added at the beginning of the production process.
What is the unit cost for materials for Layla using the FIFO method?
A)$2.00
B)$2.03
C)$4.53
D)none of the above

Question

Quizplus · Accepted Answer

The unit cost for materials using FIFO is calculated by dividing the total materials cost by the number of units started and completed. Since all materials are added at the beginning, the cost is $42,000 / 21,000 = $2.00 per unit.

Layla Company Began Making Mascara in November 2018 Using a Single-Step