Question

Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows. Work in Process, May 1 (51,000 units, 100% complete for direct materials, 35% complete with respect to conversion costs; includes $72,500 of direct material cost; $36,050 of conversion costs). Units started in May 227,000 Units completed in May 202,000 Work in Process, May 31 (76,000 units, 100% complete for direct materials; 15% complete for conversion costs). Costs incurred in May Direct materials $ 354,120 Conversion costs $ 351,990 If Pitt Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for May.

Multiple Choice

$0.79; $3.39.

$3.39; $3.39.

$3.43; $3.43.

$3.39; $0.70.

$1.56; $1.80.

Answer 1

		Direct Material		Conversion Cost
	Units	Degree of Completion	Equivalent Units	Degree of Completion	Equivalent Units
Opening Work In Progress	51000	0%	0	65%	33150
Introduced	151000	100%	151000	100%	151000
Units Completed in May	202000
Closing Units	76000	100%	76000	15%	11400
Equivalent Units Produced			227000		195550
Total Cost Incurred			354120		351990
Cost Per Equivalent Units			1.56		1.8
=Total Cos Incurred/Equivalent Units Produced
Therefore, The answer would be- $1.56:$1.80.
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