Bost Products, Inc. manufactures plastic products and uses process costing to ac

Question

Bost Products, Inc. manufactures plastic products and uses process costing to account for the cost of products manufactured. All product costs are added evenly throughout the production process. The following information was available for the plastic department for the month of December:

                                                            Number of units                       Production Costs

Beginning work-in-process (60% complete) 20,000                                $ 72,000

Current period production                           300,000                               $1,809,000

Ending work-in-process (35% complete)    10,000

Required: If Bost uses the first-in, first-out (FIFO) method of computing equivalent units and assigning product costs, what is the cost per equivalent unit? (Round to nearest cent.)

Explanation / Answer

Answer:Equivelent units=(20000*40%+290000+(10000*35%)

=301500

Cost per equivalent units=$1809000/301500

=$6 per unit

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