3 Fraley Chemical Company accounts for its production activitiesusing first-in, first-out (FIFO) process costing. Inventory recordsfor the process show a January 1 work-in-process inventory of10,000 gallons, 80 percent complete as to materials and 40 percentcomplete as to conversion. The January 31 inventory consisted of15,000 gallons, 60 percent complete as to materials and 20 percentcomplete as to conversion. In January, 40,000 gallons werecompleted and transferred to the finished goods inventory. Costs inthe Work-in-Process Inventory account in January are as follows:Materials Conversion Total Costs in beginning inventory $ 1,920 $672 $ 2,592 Costs added this period 8,405 5,694 14,099 Total costto be accounted for $10,325 $6,366 $16,691 a. Using first-in,first-out (FIFO) process costing, calculate the equivalent units(in gallons) for January. b. Using first-in, first-out (FIFO)process costing, calculate the cost per equivalent unit forJanuary. (keep answers to 3 decimal points for calculation of partc) c. Using first-in, first-out (FIFO) process costing, calculatethe cost of the 40,000 gallons that were completed and transferredout in January. Show your calculations.
