Carmelita Inc., has the following information available: Costs from Beginning In
ID: 2526509 • Letter: C
Question
Carmelita Inc., has the following information available:
Costs from Beginning Inventory
Costs from current Period
Direct materials
$5,200
$21,700
Conversion costs
6,400
156,000
At the beginning of the period, there were 400 units in process that were 42% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 5,200 units were started and completed. Ending inventory contained 400 units that were 33% complete as to conversion costs and 100% complete as to materials costs. Assume that the company uses the FIFO process cost method. Round cost per unit figures to two cents, i.e., $2.22, when calculating total costs.
The total costs that will be transferred into Finished Goods for units started and completed were
a.$165,932
b.$111,174
c.$237,666
d.$178,696
Costs from Beginning Inventory
Costs from current Period
Direct materials
$5,200
$21,700
Conversion costs
6,400
156,000
Explanation / Answer
Equivalent unit of material = 5200+400 = 5600
Equivalent unit of conversion = (400*58%+5200*100%+400*33%) = 5564
Cost per equivalent unit of material = 21700/5600 = 3.88 per unit
Cost per equivalent unit of conversion = 156000/5564 = 28.03
Cost of units started and completed = (3.88+28.03)*5200 = 165932
so answer is a) 165932