Reuse Cookware, Inc., manufactures sets of heavy-duty pots. It has just complete

Question

Reuse Cookware, Inc., manufactures sets of heavy-duty pots. It has just completed production for aug. At the beginning of aug., it's work in process inventory account showed direct materials costs $31,700 and conversion costs of $29,400. The cost of direct materials used in aug. was $275,373; conversion costs were $175,068. During the month, the company started and completed 15,190 sets. For aug., a total of 16,450 equivalent sets for direct materials and 16,210 equivalent sets for conversion costs have been computed.<br />From this information, determine the cost per equivalent set for aug. Use the FIFO costing method.<br />Then, using the completed FIFO costing method data and Avg. costing method, determine the cost per equivalent set for aug. Assume equivalent sets are 16,900 for direct materials costs and 17,039 for conversion costs.

Explanation / Answer

Particulars Materials Conversion Total cost Beginning work in progress 31700 29400 Materials used in august 275373 175068 307,073 204,468 Equivalent units in aug 16450 16210 Equivalent unit cost= total cost/equivalent units 307,073/16450 204,468/16210 Equivalent unit cost 18.66 12.61 Produced units in august 15190 equivalentcost of production= equivalent cost per unit*no of unitsproduced 18.66*15190 12.61*15190 equivalentcost of production= 283,445 192,305.40 302,680.40 Total cost 307,073 204,468 Equivalent units 16900 17039 Cost per equivalent set= Total cost/equivalent units 307,073/16900 204,468/17039 18.17 12

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