Question

Carmelita Inc., has the following information available:

Costs from
Beginning InventoryCosts from
Current Period
Direct materials$5,800         $22,300     
Conversion costs5,700         148,900     
At the beginning of the period, there were 400 units in process that were 44% 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 25% 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.$216,580
b.$120,666
c.$173,264
d.$160,888

Show work please

Answer 1

Answer: D- $160,888

Explanation:

beginning WIP:

400 units 100% complete for materials, so 0% will be added during the period

400 units 44% complete for conversion, so 56% will be added during the period = 224 equivalent units

units started and completed:

5,200 units 100% complete for materials and conversion

ending WIP:

400 units 100% complete for materials = 400 equivalent units

400 units 25% complete for conversion = 100 equivalent units

materials cost per equivalent unit = $22,300 / (5,200 + 400) = $3.98

conversion cost per equivalent unit = $148,900 / (5,200 + 224 + 100) = $26.96

total costs per equivalent unit = $30.94

total costs for units started and completed during the period = 5,200 x $30.94 = $160,888