Question 8

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.