First-In, First-Out Method; Equivalent Units Aztec Inc. produces soft drinks. Mi
ID: 2548838 • Letter: F
Question
First-In, First-Out Method; Equivalent Units
Aztec Inc. produces soft drinks. Mixing is the first department, and its output is measured in gallons. Aztec uses the FIFO method. All manufacturing costs are added uniformly. For July, the mixing department provided the following information:
Required:
1. Calculate the equivalent units for July.
equivalent units
2. Calculate the unit cost. Round your answer to the nearest cent.
$per unit
3. Assign costs to units transferred out and EWIP using the FIFO method. Note: Do not round interim computations.
Production: Units in process, July 1, 80% complete 30,000 gallons Units completed and transferred out 195,000 gallons Units in process, July 31, 75% complete 12,000 gallons Costs: Work in process, July 1 $ 48,000 Costs added during July 390,000Explanation / Answer
Equivalent unit :
Manufacturing cost = (30000*20%+165000*100%+12000*75%) = 180000 equivalent unit
Cost per equivalent unit = 390000/180000 = 2.17 per unit cost
3. Assign costs to units transferred out and EWIP using the FIFO method. Note: Do not round interim computations.
Cost of units transferred out = (6000+165000*2.1667+48000) = 418500
Ending work in process = 9000*2.167 = 19500
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