Answer the following questions using the information below S

Answer the following questions using the information below: Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electroni uses weighted-average costing. cs The following information is available for the month of March 2015 for the Assembly department. Work in process, beginning inventory 300 units Conversion costs (30% complete) Units started during April Work in process, ending inventory: 800 units 100 units Conversion costs (50% complete) The cost details for the month of March are as follows: Work in process, beginning inventory: Direct materials Conversion costs $345,000 $360,000 $700,000 1,120,000 Direct materials costs added during April Conversion costs added during April 14) What are the equivalent units for direct materials and conversion costs, respectively, for March? A) 1,100 units; 1,100 units B) 1,050 units; 1,100 units C) 1,100 units; 1,050 units D) 1000 units; 1050 units

Solution

Answer

Reconciliation of Units

Opening WIP

300

Introduced

800

TOTAL

1100

Transferred

1000 [1100 – 100]

Closing WIP

100

Statement of Equivalent Units

Material

Conversion Cost

Units

Complete %

Equivalent units

Complete %

Equivalent units

[A]

[B]

[C = A x B]

[D]

[E = A x D]

Transferred

1000

100%

1000

100%

1000

Closing WIP

100

100%

100

50%

50

Total

1100

Total

1100 units

Total

1050 units

1,100 units for Direct materials, and
1,050 units for conversion cost.

Reconciliation of Units
Opening WIP	300
Introduced	800
TOTAL	1100
Transferred	1000 [1100 – 100]
Closing WIP	100