The following are the details of Jennifer Corp. with respect to Inventories and Conversion Costs (CC):
If the Jennifer Corp. follows the First-In, First-Out (FIFO) method, then find the total equivalent cost per unit for Conversion Costs.

Question

The following are the details of Jennifer Corp. with respect to Inventories and Conversion Costs (CC):
 If the Jennifer Corp. follows the First-In, First-Out (FIFO) method, then find the total equivalent cost per unit for Conversion Costs.

Quizplus · Accepted Answer

According to FIFO, the Total Equivalent Units for Conversion Costs = (Units in Beginning WIP Inventory × Percentage of Resource Added this Period) + (Units Started and Completed During the Period × Percentage of Resource Added this Period) + (Units in Ending WIP Inventory × Percentage of Resource Added this Period) = (1,600 units × 30%) + (26,200 units × 100%) + (2,000 units × 30%) = 480 units + 26,200 units + 600 units = 27,280 units.
Equivalent Cost per Unit of Conversion Costs = Conversion Cost Added to WIP Inventory this Period/Total Equivalent Units for Conversion Costs = $200,000/ 27,280 units = $7.33

The Following Are the Details of Jennifer Corp