Reid Company Uses a Process Costing System in Which Units

question 55

Multiple Choice

Reid Company uses a process costing system in which units go through several departments. In the Cutting Department for June, units in the beginning work-in-process inventory were 80% complete with respect to conversion costs. Units in the ending work-in-process inventory were 25% complete with respect to conversion costs. Other data for the department for June are as follows:
$\begin{array} { l | r | r | } \hline & \text { Units } & \text { Conversion costs } \\\hline \begin{array} { l } \text { Work in process inventory } \\\text { on June 1 }\end{array} & 15,000 & \$ 50,200 \\\hline \begin{array} { l } \text { Units started into } \\\text { production }\end{array} & 145,000 \\\hline \begin{array} { l } \text { Conversion costs incurred } \\\text { during June }\end{array} & & \$ 175,700 \\\hline \begin{array} { l } \text { Units completed and } \\\text { transferred to the next } \\\text { department during June }\end{array} & 130,000 & \\\hline\end{array}$


- Assuming that the company uses the FIFO cost method,what is the cost per equivalent unit for conversion costs for June,rounded to the nearest cent?

• A) $1.80.
• B) $1.40.
• C) $1.64.
• D) $1.35.

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