The Matsui Lubricants plant uses the FIFO method to account for its work-in-proc

Question

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day:

Quantity information is obtained from the manufacturing records and includes the following:

Beginning WIP inventory Direct materials $ 976 Conversion costs 272 Current period costs Direct materials 11,440 Conversion costs 6,644 Required: (1) Compute the equivalent units for the materials and conversion cost calculations. Answer is complete but not entirely correct Equivalent units for materials 2,800 Equivalent units for conversion costs 240 (2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Cost Per Equivalent Unit Direct materials S Conversion costs 3.20 1.90

Explanation / Answer

1) IN Out Equivalent Units Equivalent units particulars Units particulars units Direct materials conversion costs Opening WIP 600 beginning 600 40% 240 47% 282 Units inroduced 4000 Started 4000 100% 4000 100% 4000 Ending 1200 40% 480 20% 240 4600 5800 4720 4522 2 Particulars Direct material Conversion costs incurred 11440 6644 Units 4720 4522 Per unit cost 2.42 1.47 Summary Units Cost per unit Direct materials 4720 2.42 Conversion 4522 1.47

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