Middleton uses process costing to control costs in the manuf

Middleton uses process costing to control costs in the manufacture of ice picks for the skating industry. The following information pertains to operations for June.

The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.
Costs pertaining to June are as follows:
Beginning inventory: direct materials, $85,215; direct labor, $31,860; manufacturing overhead, $24,080.
Costs incurred during the month: direct materials, $741,000; direct labor, $288,990; manufacturing overhead, $615,030.

What is the equivalent unit cost for materials assuming Kimbeth uses first-in, first-out (FIFO) process costing?

$4.75 per unit.

$4.85 per unit.

$4.79 per unit.

$7.22 per unit.

Solution

Equivalent unit of material = (24000*40%)+(114000*100%)+(36000*90%) = 156000 Unit

Cost per equivalent unit of material = 741000/156000 = 4.75 per unit

SO answer is c) $4.75 per unit