Question:
FIFO Method
The following pertains to the Cereal Division of McKenzie Corporation. Conversion costs for this division were 80 percent complete as to beginning work-in-process inventory and 50 percent complete as to ending work-in-process inventory. Information about conversion costs for July is as follows:
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Conversion
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Units
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Costs
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WIP at July 1 (80% complete)
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300,000
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$ 387,000
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Units started and costs incurred during July
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1,620,000
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2,178,000
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Units completed and transferred to next department during July
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1,200,000
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?
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The Cereal Division uses FIFO.
Required
a. What was the conversion cost of work-in-process inventory in the Cereal Division at July 31?
b. What were the conversion costs per equivalent unit produced last period and this period, respectively?