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# Equivalent units and cost

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Ricko Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning:
Units in process 900
Stage of completion with respect to materials 80%
Stage of completion with respect to conversion 90%
Costs in the beginning inventory:
Materials cost \$1,008
Conversion cost \$27,621
Units started into production during the month 19,000
Units completed and transferred out 19,700
Costs added to production during the month:
Materials cost \$22,992
Conversion cost \$650,504
Work in process, ending:
Units in process 200
Stage of completion with respect to materials 90%
Stage of completion with respect to conversion 10%

a. What are the equivalent units for materials for the month in the first processing department?

b. What are the equivalent units for conversion costs for the month in the first processing department?

c. The cost per equivalent unit for materials for the month in the first processing department is:

d. The cost per equivalent unit for conversion costs for the first department for the month is:

e. The cost per equivalent whole unit for the month in the first processing department is:

f. The total cost transferred from the first processing department to the next processing department during the month is:

g. The cost of ending work in process inventory in the first processing department according to the company's cost system is:

#### Solution Preview

Ricko Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning:
Units in process 900
Stage of completion with respect to materials 80%
Stage of completion with respect to conversion 90%
Costs in the beginning inventory:
Materials cost \$1,008
Conversion cost \$27,621
Units started ...

#### Solution Summary

The solution explains how to calculate the equivalent units, cost and the cost of units transferred and in ending inventory

\$2.49