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Question - Gamma Growerz grows, harvests and processes timber for use in the building industry. The following data relate to the company's sawmill during March:
Work in process, 1 March:
Direct material $ 130 000
Conversion 360 000
Costs incurred during March:
Direct material $ 850 000
Conversion 1 380 000
The equivalent units for March were as follows:
Weighted average
FIFO
Direct material
14,000
8,500
Conversion
3,480
2,000
Required -
a. Calculate the cost per equivalent unit for both direct material and conversion during March. Use weighted average process costing.
b. Repeat requirement (a) using the FIFO method.
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