Puri Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory:
Units in beginning work in process inventory 400
Materials costs $4,800
Conversion costs $3,300
Percent complete with respect to materials 85 %
Percent complete with respect to conversion 45 %
Units started into production during the month 5,800
Units transferred to the next department during
the month 5,100
Materials costs added during the month $69,500
Conversion costs added during the month $82,300
Ending work in process inventory:
Units in ending work in process inventory 1,100
Percent complete with respect to materials 55 %
Percent complete with respect to conversion 45 %
The cost per equivalent unit for conversion costs for the first department for the month is closest to:.

$15.20

Explanation:

Computation for the cost per equivalent unit for conversion costs for the first department

First step

FIFO METHOD

IN

Beginning WIP400

Units Introduced5800

Total 6,200

OUT

Beginning WIP Completed400

Production started and Completed 4,700

(5800-1100)

Ending WIP1100

Total 6,200

Equivalent Units

Materials

% CompleteEquivalent unit

Beg. WIP Completed40015%60

(15%*400=60)

Production started and Completed 4,700 (5800-1100) 100%4,700

(100%*4,700=4,700)

Ending WIP1,10055%605

(55%*1,100=605)

TOTAL 5,365

(60+4700+605)

Equivalent Units

Conversion

% CompleteEquivalent unit

Beg. WIP Completed40055% 220

(55%*400=220)

Production started and Completed 4,700 (5800-1100) 100%4,700

(100%*4,700=4,700)

Ending WIP1,10045%495

(45%*1,100=495)

TOTAL 5,415

(220+4700+495)

Second step is to Compute the cost per equivalent unit for conversion costs

Cost Statement

Equivalents unit (A)Current period cost incurred (B)Cost per unit (B/A)

Material5,365(a) $69,500(b) $12.95

Conversion5,415(a) $82,300(b) $15.20

Therefore the Conversion cost for the first department for the month closest to $15.20