Reference no: EM131751368

Cornerstone Exercise 6.8 (Algorithmic) 

Cost Information and FIFO

Gunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December:

Direct Materials		Conversion Costs
Units started and completed	42,000	42,000
Add: Units in beginning work in process ×
Percentage complete:
4,000 × 0% direct materials	-
4,000 × 50% conversion Costs		2,000
Add: Units in ending work in process ×
Percentage complete:
10,000 × 100% direct materials	10,000	-
10,000 × 35% conversion Costs	-	3,500
Equivalent units of output	52,000	47,500
Costs:
Work in process, December 1:
Direct Material		$52,000
Conversion Costs		8,000
Total Work in process		$60,000
Current costs:
Direct Material		$728,000
Conversion Costs		142,500
Total current costs		$870,500

Required:

1. Calculate the unit cost for December, using the FIFO method. mce_markernbsp;per equivalent unit

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

Cost of goods transferred out
Cost of EWIP
BWIP
Current (December)
Total

3. What if you were asked for the unit cost from the month of November? Calculate November's unit cost.