Sarfina Corporation uses the FIFO method in its process costing system.Operating data for the Casting Department for the month of September appear below:
$$\begin{array} { | l | c | c }
\hline & \text { Units } & \begin{array} { c }
\text { Percent Complete with } \
\text { Respect to Comrersion }
\end{array} \
\hline \text { Beginning work-in-process imventory } & 15,000 & 20 \% \
\hline \begin{array} { l }
\text { Transterred in from the prior department during } \
\text { September }
\end{array} & 89,000 & \
\hline \text { Ending work-in-process imeentory } & 24,000 & 90 \% \
\hline
\end{array}$$
According to the company's records,the conversion cost in beginning work-in-process inventory was $15,660 at the beginning of September.Additional conversion costs of $526,524 were incurred in the department during the month.What would be the cost per equivalent unit for conversion costs for September? (Round off to three decimal places. )

Question

Sarfina Corporation uses the FIFO method in its process costing system.Operating data for the Casting Department for the month of September appear below:
$$\begin{array} { | l | c | c } 
\hline & \text { Units } & \begin{array} { c } 
\text { Percent Complete with } \
\text { Respect to Comrersion }
\end{array} \
\hline \text { Beginning work-in-process imventory } & 15,000 & 20 \% \
\hline \begin{array} { l } 
\text { Transterred in from the prior department during } \
\text { September }
\end{array} & 89,000 & \
\hline \text { Ending work-in-process imeentory } & 24,000 & 90 \% \
\hline
\end{array}$$
 According to the company's records,the conversion cost in beginning work-in-process inventory was $15,660 at the beginning of September.Additional conversion costs of $526,524 were incurred in the department during the month.What would be the cost per equivalent unit for conversion costs for September? (Round off to three decimal places. )

Quizplus · Accepted Answer

The cost per equivalent unit for conversion costs is calculated by dividing the total conversion costs by the equivalent units of production. The equivalent units for conversion are calculated by considering the work done on both the beginning and ending inventory, as well as the units started and completed during the period.

Sarfina Corporation Uses the FIFO Method in Its Process Costing