Zing Inc.calculates cost for an equivalent unit of production using both the weighted-average and the FIFO methods.
Cost per equivalent unit for conversion under the FIFO method is calculated to be:
A)$3.535.
B)$4.040.
C)$4.230.
D)$3.000.
E)$2.875.

Question

Zing Inc.calculates cost for an equivalent unit of production using both the weighted-average and the FIFO methods. 
Cost per equivalent unit for conversion under the FIFO method is calculated to be:
A)$3.535. 
B)$4.040. 
C)$4.230. 
D)$3.000. 
E)$2.875.

Quizplus · Accepted Answer

The cost per equivalent unit for conversion under the FIFO method is calculated as follows:
Total conversion cost for the period = $101,640
Units completed and transferred out =1,500
Equivalent units of conversion for ending WIP inventory = (1500-1000) = 500
Cost per equivalent unit of conversion under FIFO= (101,640/1,500)+(5,600/500)= $68+ $11.20= $79.20
Therefore, the cost per equivalent unit for conversion under the FIFO method is $4.23.

Zing IncCalculates Cost for an Equivalent Unit of Production Using Both