Question:
1. Loren Inc. manufactures products that pass through two or more processes. During April, equivalent units were computed using the FIFO method:
Units started and completed 4,600
Units in BWIP A? Fraction to complete (60 percent) 840
Units in EWIP A? Fraction complete (4,000 A? 60 percent) 2,400
Equivalent units of output (FIFO) 7,840
April's costs to account for are as follows:
BWIP (40 percent complete) $ 1,120
Materials 10,000
Conversion cost 4,000
Total $15,120
Required:
1. Calculate the unit cost for April using the FIFO method. Round to two decimal places.
2. Using the FIFO method, determine the cost of EWIP and the cost of the goods transferred out.