Question

# Carmelita Inc., has the following information available: Costs from Beginning InventoryCosts from Current Period Direct materials\$5,800         \$22,300     ...

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

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

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