Duday Company manufactures Product ABC in a two- stage production cycle in Department 1 and 2. Materials are added at the end of the process in Department 2. Conversion costs for Department 2 were 50% complete as to the 6,000 units in Beginning WIP and 75% complete as to the to the 8,000 units in ending WIP, 12,000 units were completed and transferred out Department 2 during October. An analysis of the cost relating to WIP and production activity in Department 2 for October follows: Transferred in cost Materials Cost Conversion Cost Beg. WIP Cost Cost Added 12,000 2,500 1,000 29,000 5,000 5,000 Compute the total cost per unit transferred-out for October of Product ABC using FIFO.

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…