Department C of Boot and Shoe Company
Information concerning Department C of Boot and Shoe Company for the month of March is as follows: Materials
$\begin{array}{lll}&\text { Units }&\text { Cost }\
\text { Work-in-Process Inventory, beginning of month } & 20,000 & \$ 14,250 \
\text { Started in March } & 85,000 & \$ 66,600 \
\text { Units completed } & 90,000 & \
\text { Work-in-Process Inventory, end of month } & 15,000 &
\end{array}$ All materials are added at the beginning of the process.
-Refer to Department C of Boot and Shoe Company. What would be the cost (rounded to two decimal places) per equivalent unit for materials when using the first-in, first-out method?
A) $0.74
B) $0.77
C) $0.78
D) $0.90

Question

Quizplus · Accepted Answer

The cost per equivalent unit for materials using the FIFO method is calculated by dividing the cost of materials added during the month by the number of units started and completed during the month. Here, the cost of materials added is $66,600, and the units started and completed are 85,000 (since 90,000 were completed and 20,000 were already in process, leaving 15,000 still in process). Thus, the cost per equivalent unit is $66,600 / 85,000 = $0.78.

Department C of Boot and Shoe Company Information Concerning Department

Department C of Boot and Shoe Company
Information Concerning Department