Zuniga Ltd uses a process costing system. During May, 1,200 units were transferred into Department 2 at a cost of $38,040. Direct materials are added at the beginning of the process. Additionally: Using the FIFO method, the cost per equivalent unit for transferred-in units was
A) $28.00
B) $31.70
C) $26.23
D) $33.87

Question

Quizplus · Accepted Answer

To calculate the cost per equivalent unit for transferred-in units using FIFO method, we need to divide the total cost of transferred-in units by the equivalent units of transferred-in units.

Total cost of transferred-in units = $38,040

Equivalent units of transferred-in units = 1,200 units

Cost per equivalent unit for transferred-in units using FIFO method = Total cost of transferred-in units / Equivalent units of transferred-in units
= $38,040 / 1,200 units
= $31.70

Therefore, the correct answer is choice B, $31.70.

Zuniga Ltd Uses a Process Costing System