At the beginning of the month, the Forming Department of Martin Manufacturing ha

Question

At the beginning of the month, the Forming Department of Martin Manufacturing had 23,000 units in inventory, 40% complete as to materials, and 20% complete as to conversion. During the month the department started 86,000 units and transferred 88,000 units to the next manufacturing department. At the end of the month, the department had 21,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. If Martin Manufacturing uses the FIFO method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.

Multiple Choice

104,800 materials; 100,600 conversion.

81,800 materials; 77,600 conversion.

81,400 materials; 90,600 conversion.

95,600 materials; 100,600 conversion.

95,600 materials; 96,000 conversion.

Explanation / Answer

Equivalent units for Direct material and Conversion will be:

So, correct answer is d.

Martin Manufacturing Forming Department Equivalent Units Flow of Production Flow of physical units Direct material Conversion Cost Units to account for:    Beginning Inventory 23,000    Units started into production 86,000    Total physical units to account for 109,000 Units accounted for:     Beginning Inventory (60 and 80 %) 23,000 13800 18400    Started and completed 65,000 65,000 65,000 Completed and transferred out 88,000 78,800 83,400 Ending WIP (80% ond 60%) 21,000 16,800 12,600 Total units to be assigned cost 109,000 95,600 96,000

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