Homework SourseCarmelita Inc has the following information available At the
Carmelita Inc., has the following information available:
At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method.
The equivalent units of production for direct materials and conversion costs, respectively, were
a.4,840 for direct materials and 4,802 for conversion costs
b.5,340 for direct materials and 4,902 for conversion costs
c.4,602 for direct materials and 4,802 for conversion costs
d.4,902 for direct materials and 4,802 for conversion costs
| Costs from Beginning Inventory | Costs from current Period | |
| Direct materials | 2,000 | $ 22,252 |
| Conversion costs | 6,200 | 150,536 |
Solution
a.4,840 for direct materials and 4,802 for conversion costs
Explanation
| Direct Materials | Conversion costs | |
| Units in beginning WIP (A) | 500 | 500 |
| % of completion of beginning WIP in previous period (B) | 100% | 60% |
| % of beginning WIP completed this period [C=100%-B] | 0% | 40% |
| Equivalent units in beginning WIP [D=A×C] | 0 | 200 |
| Units started and completed in current period | 4,500 | 4,500 |
| Units closing WIP (E) | 340 | 340 |
| % of completion of closing WIP (F) | 100% | 30% |
| Equivalent units in closing WIP (G=E×F) | 340 | 102 |
| Total equivalent units | 4,840 | 4,802 |
| (0+4500+340) | (200+4500+102) |
