Calculation of Unit Costs—FIFO Method. The Choate Corporation employs a process cost system to accumulate costs for its Product CHOA. Inventories, costs, and production data for the month of October are shown below.
Sept. 30 Oct. 31
Raw materials 100,000 lbs. 80,000 lbs.
Raw materials cost $100,000
Work in process inventories:
All materials, 40%, complete as to labor and
overhead 20,000 units
Cost $ 84,000
All materials, 33i/3% complete as to labor and
overhead 30,000 units
Finished goods inventory 40,000 units 24,000 units
Cost $448,000
Purchases of raw materials 440,000 lbs. @ $1.10 per lb.
Transferred to production 460,000 lbs.
Production ratio: 2 lbs:l unit of CHOA
Completed during the month 220,000 units
Materials and units are costed on the fifo method
Direct labor $1,198,800
Factory overhead 421,800
Required: (1) Equivalent production units for materials, labor, and factory overhead.
(2) Unit costs for the three cost elements.
(3) Cost of units transferred to finished goods inventory, using the FIFO method,
(4) Cost of ending inventory work in process, in detail.
(5) Number of units sold and the cost of the finished goods inventory on October 31 using the: (a) FIFO method; (b) average cost method; (c) cost difference per unit and in total.
(2) Unit costs for the three cost elements.
(3) Cost of units transferred to finished goods inventory, using the FIFO method,
(4) Cost of ending inventory work in process, in detail.
(5) Number of units sold and the cost of the finished goods inventory on October 31 using the: (a) FIFO method; (b) average cost method; (c) cost difference per unit and in total.