Question

Carmelita Inc. has the following information available:

	Costs from Beginning Inventory	Costs from Current Period
Direct materials	$5,400	$25,500
Conversion costs	6,300	145,200

At the beginning of the period, there were 600 units in process that were 43% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,600 units were started and completed. Ending inventory contained 400 units that were 26% 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.4,600 for direct materials and 5,046 for conversion costs

b.5,046 for direct materials and 5,000 for conversion costs

c.5,000 for direct materials and 5,046 for conversion costs

d.5,046 for direct materials and 5,046 for conversion costs

Answer 1

Answer c. 5,000 for direct materials and 5,046 for conversion costs

Explanation :

Equivalent units of production for Direct materials during the period

Beginning inventory	600	0%	0
Started and completed	4,600	100%	4,600
Ending inventory	400	100%	400
Total equivalent units of production for materials			5,000

Equivalent units of production for conversion costs during the year

Beginning inventory	600	57%	342
Started and completed	4,600	100%	4600
Ending inventory	400	26%	104
Total equivalent units of production for conversion costs			5,046