Figure 6-9
Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2016 are as follows:
Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete.
-Layla Company began making mascara in November 2016 using a single-step process. Layla incurred $42,000 for materials and $48,640 for conversion during the month. There were 21,000 cases of mascara started in November and 3,000 cases unfinished (40 percent complete) at the end of the period. All materials were added at the beginning of the production process. What is the unit cost for materials for Layla using the FIFO method?

Question

Figure 6-9
Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2016 are as follows:
  Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete.
-Layla Company began making mascara in November 2016 using a single-step process. Layla incurred $42,000 for materials and $48,640 for conversion during the month. There were 21,000 cases of mascara started in November and 3,000 cases unfinished (40 percent complete) at the end of the period. All materials were added at the beginning of the production process. What is the unit cost for materials for Layla using the FIFO method?

Quizplus · Accepted Answer

The unit cost for materials using FIFO is calculated by dividing the total materials cost by the number of units started and completed. Since all materials are added at the beginning, the unit cost for materials is $42,000 / 21,000 = $2.00.

Figure 6-9 Anzalone Corporation Adds Raw Materials to Production at the Beginning