Nader Inc.has the following information available: At the beginning of the period,there were 500 units in process that were 40 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,4,300 units were started and completed.Ending inventory contained 320 units that were 80 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO costing method. )
-The cost of completing a unit of Nader Inc.during the current period was

Question

Quizplus · Accepted Answer

To determine the cost of completing a unit, we need to calculate the equivalent units of production and the total costs incurred during the period, and then divide the total costs by the equivalent units.

Equivalent units of production:
Direct materials:
Beginning inventory: 500
Started and completed: 4,300
Ending inventory: 320
Total equivalent units: 5,120 units

Conversion costs:
Beginning inventory: 500 × 40% = 200
Started and completed: 4,300 + 500 = 4,800
Ending inventory: 320 × 80% = 256
Total equivalent units: 5,256 units

Total costs incurred during the period:
Direct materials: $214,720
Conversion costs: $183,200
Total: $397,920

Cost per equivalent unit:
Direct materials: $214,720 ÷ 5,120 = $41.87
Conversion costs: $183,200 ÷ 5,256 = $34.84

Cost of completing a unit:
Direct materials: $41.87
Conversion costs: $34.84
Total: $76.71 ($41.87 + $34.84)

Therefore, the cost of completing a unit of Nader Inc. during the current period was $35.60 (rounded to two decimal places). The correct answer is B.

Nader Inchas the Following Information Available: at the Beginning of the the Period,there