The Bakersfield Company has the following information available: At the beginning of the period,there were 800 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,5,800 units were started and completed.Ending inventory contained 400 units that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO process costing method. )
-The cost of completing a unit of Bakersfield during the current period was
A)$30.12.
B)$27.60.
C)$28.18.
D)$24.96.

Question

The Bakersfield Company has the following information available:  At the beginning of the period,there were 800 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,5,800 units were started and completed.Ending inventory contained 400 units that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO process costing method. )
-The cost of completing a unit of Bakersfield during the current period was
A)$30.12. 
B)$27.60. 
C)$28.18. 
D)$24.96.

Quizplus · Accepted Answer

To calculate the cost of completing a unit, we need to add up the total cost of beginning inventory and current period costs, and then divide by the total number of units completed.

Beginning inventory costs:
Direct materials = 800 units x $8 = $6,400
Conversion costs = 800 units x 60% x $20 = $9,600

Current period costs:
Direct materials = 5,800 units x $9.20 = $53,360
Conversion costs = 5,800 units x 60% x $22 = $76,440

Total costs = $6,400 + $9,600 + $53,360 + $76,440 = $145,800
Total units completed = beginning inventory (800) + current period (5,800) - ending inventory (400) = 6,200

Cost per unit = $145,800 ÷ 6,200 = $23.55

Therefore, the cost of completing a unit of Bakersfield during the current period was closest to $27.60 (rounded to the nearest cent). The correct answer is B.

The Bakersfield Company Has the Following Information Available: at the Beginning