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 x Fraction to complete (60 percent) ........... 840
Units in EWIP x Fraction complete (4,000 x 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.
2. Using the FIFO method, determine the cost of EWIP and the cost of the goods transferred out.