Question

Carmelita Inc., has the following information available:

Costs from Beginning Inventory Costs from Current Period

Direct materials $4,400 $21,700

Conversion costs 6,600 153,600

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, 5,300 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. The company uses the FIFO process cost method. The equivalent units of production for direct materials and conversion costs, respectively, were

a.5,300 for direct materials and 5,727 for conversion costs

b.5,727 for direct materials and 5,727 for conversion costs

c.5,727 for direct materials and 5,700 for conversion costs

d.5,700 for direct materials and 5,727 for conversion costs

Answer 1

Correct answer------------d.5,700 for direct materials and 5,727 for conversion costs

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion	Material	Conversion
Beginning WIP	500	100%	41%	0%	59%
Units introduced	5,700
Total units to be accounted for	6,200
Completed and Transferred unit	5,800	0%	0%	100%	100%
Ending WIP	400	0%	0%	100%	33%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	500	0%	-	59%	295
From units started/Introduced	5,300	100%	5,300	100%	5,300
Total	5,800		5,300		5,595
	Total Units	Material		Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	400	100%	400	33%	132
Total EUP	6,200		5,700		5,727