Identify the net impact on Company K’s year 1 income as a result of this fair value hedge of a firm commitment.

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Chapter 6, Problem 6EP

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Identify the net impact on Company K’s year 1 income as a result of this fair value hedge of a firm commitment.

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A company uses a process costing system. Its finishing department's beginning inventory consisted of 48,500 units, 40% complete with respect to direct labor and overhead. The department completed and transferred out 110,000 units during this period. The ending inventory consists of 38,000 units, which are 20% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $29,500 and overhead costs of $35,500 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is_.