Carmelita Inc. has the following information available:
-At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. The cost of completing a unit during the current period was
A)$36.19
B)$34.88
C)$35.95
D)$35.89

Question

Carmelita Inc. has the following information available:  ​
-At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method.​ The cost of completing a unit during the current period was
A)$36.19 
B)$34.88 
C)$35.95 
D)$35.89

Quizplus · Accepted Answer

The FIFO method considers only the costs incurred during the current period for units started and completed. The cost per equivalent unit is calculated based on the costs added during the period divided by the equivalent units of production.