Nestl S.A. uses process costing for its food processing operations. In August 2032, the company incurs costs of $800,000 in the production department. The department

Nestlé S.A. uses process costing for its food processing operations. In August 2032, the company incurs costs of $800,000 in the production department. The department processes 200,000 units. Beginning work in process was 20,000 units that were 50% complete. During the period, 180,000 units were completed and transferred out. Ending work in process was 40,000 units, 30% complete.

Required:

• Calculate the equivalent units of production for direct materials and conversion costs using the FIFO method.
• Determine the cost per equivalent unit for direct materials and conversion costs.
• Allocate costs to completed units and units in ending work in process using the FIFO method.
• Prepare a process costing statement for Nestlé S.A.
• Compare and contrast the FIFO method with the weighted average method in process costing.