Question

# Carmelita Inc. has the following information available: Costs from Beginning Inventory Costs from Current Period Direct...

Carmelita Inc. has the following information available:

 Costs from Beginning Inventory Costs from Current Period Direct materials \$4,500 \$25,500 Conversion costs 6,700 156,100

At the beginning of the period, there were 600 units in process that were 41% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 5,500 units were started and completed. Ending inventory contained 300 units that were 34% 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.5,956 for direct materials and 5,800 for conversion costs

b.5,956 for direct materials and 5,956 for conversion costs

c.5,800 for direct materials and 5,956 for conversion costs

d.5,500 for direct materials and 5,956 for conversion costs

Solution:

Answer : Option  c.5,800 for direct materials and 5,956 for conversion costs

Calculation:

 Equivalent Units Materials Conversion Costs Particulars Units to be accounted for % Completed EUP - Materials % EUP - Conversion Beginning Inventory 600 0 59% 354 Units Started and Completed 5500 100% 5500 100% 5500 Ending Inventory 300 100% 300 34% 102 Equivalent Units 6400 5800 5956

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