Question 3

Tiger Co. uses FIFO method of process costing to account for the production of canned food. Begining inventory for January consited of 6,000 units that were 25% completed. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. 14,000 units were started into the process during Janauary. During January 18,000 units were completed. Ending inventory still in the process at the end of January conisted of 2,000 units that were 75% completed. Beginning inventory consisted of $29,400 in materials and $3,600 in conversion costs. January costs were $56,000 for materials and $28,800 for conversion costs. The cost per unit using the FIFO method would be

Select one:

a.

$8.50

b.

$4.00

c.

$1.50

d.

$5.60