Kimbeth Manufacturing uses process costing to control costs in the manufacture o

Question

Kimbeth Manufacturing uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November. The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs. Costs pertaining to November are as follows: Beginning inventory direct materials $130,660, direct labor, $48,860; manufacturing overhead, $36,930. Costs incurred during the month direct materials, $1,136,200, direct labor, $443,120. manufacturing overhead, $943,050. What is the equivalent unit cost for materials assuming Kimbeth uses first in, first-out (FIFO) process costing?

Explanation / Answer

The assumptions are given below

For questions that include WIP, we need to calculate equivalent units use the first in first out (FIFO) method if the percentage completion of each element of opening WIP is given

step 2 is prepare the stetement of cost per equivalent unit

Prepare a statement of equivalent units FiFO method Particulars unit material labor & manufacturing overhead % units % units Opening WIP 30400 40% 12160 80% 24320 Started and completed 144400 144400 144400 Closing WIP 45600 90% 41040 40% 18240 Equivalent units 197600 186960

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