Answer:
Material Cost per equivalent unit =$4.87
Explanation:
<em>First in First out (FIFO)methods separates completed units into fully worked and opening inventory</em>
Fully worked units: These represent units of inventory that were started in a current period and completed that same period. The fully worked units are calculated in order to separate the opening inventory from the the newly introduced when accounting for completed units under the FIFO.
For Bentley , fully worked units is
Fully worked = Newly introduced - closing work in progress
= 100,000- 24,000 = 76,000
.
Opening inventory = 16,000
Item Units Equivalent Units
Opening inventory 16,000 × 40%= 9,600
Completed unit 76,000 × 100% = 480,000
Closing inventory 24,000 × 90% = <u> 21,600
</u>
Total equivalent units 107,200
Cost per equivalent unit = Total cost/ equivalent inits
= 54560 +468,000/ 107,200 = $4.87
Material Cost per equivalent unit =$4.87
