Carmelita Inc., has the following information available: At the beginning of the
ID: 2555742 • Letter: C
Question
Carmelita Inc., has the following information available:
At the beginning of the period, there were 500 units in process that were 41% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 5,000 units were started and completed. Ending inventory contained 300 units that were 33% 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.5,000 for direct materials and 5,394 for conversion costs
b.5,394 for direct materials and 5,300 for conversion costs
c.5,300 for direct materials and 5,394 for conversion costs
d.5,394 for direct materials and 5,394 for conversion costs
Costs from Beginning Inventory Costs from current Period Direct materials $4,800 $28,400 Conversion costs 6,400 155,800Explanation / Answer
FIFO Equivalent production for a period = Equivalent units in process at the beginning of period + Units that are started and completed during the period + Equivalent units in process at the end of period.
FIFO Equivalent units of production for Direct materials = 5,000 + (300*100%) = 5,300
FIFO Equivalent units of production for Conversion costs = [500*(100-41)%] + 5,000 + (300*33%)
= 295 + 5,000 + 99
5,394
The answer is C.