Reference no: EM132649175

Question - Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction industry). The following information is for the production of these trusses for the month of February:

Work-in-process inventory, February 1 3,700 trusses

Direct materials: 100% complete $10,180

Conversion: 20% complete $14,958

Units started during February 17,700 trusses

Units completed during February and transferred out 16,700 trusses

Work-in-process inventory, February 29

Direct materials: 100% complete

Conversion: 40% complete

Costs incurred during February

Direct materials $58,740

Conversion $91,792

Required - Using the FIFO method, calculate the following:

1-a. Costs per equivalent unit.

1-b. Cost of goods completed and transferred out.

1-c. Costs remaining in the Work-in-Process Inventory account.

2. Assume that you are the company's controller. The production department's February equivalent unit cost is higher than expected. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 40 to 60% to lower the unit costs, how much would unit cost be affected by this request?