The assembly division of Marzollo Time Pieces, Inc., uses the FIFO method of pro

Question

The assembly division of Marzollo Time Pieces, Inc., uses the FIFO method of process costing. Consider the following data for the month of May 2014:

Requirement

Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule. Enter the physical units in first, then calculate the equivalent units.

Begins like this

Physical Units Direct Conversion (Watches) Materials Costs 100 510 450 160 $464,000 $79,900 Beginning work in process (May 1)a Started in May 2014 Completed during May 2014 Ending work in process (May 31)b Total costs added during May 2014$3,237000 a Degree of completion: direct materials, 80%; conversion costs, 35% b Degree of completion: direct materials, 80%; conversion costs, 40%. $1,916,000

Explanation / Answer

Physical Flow of units Flow of Productions Physical units Work in process, beginning 100 Started during the current month 510 To account for 610 Completed and transferred out:       From beginning Work in process 100       Started and completed 350 Work in process, ending 160 Units accounted for 610 Physical units Material Eq. units Conversion Eq. units Completed from Beg WIP 100 20 65 Started and completed 350 350 350 Closing WIP 160 128 64 Total Equivalent units 610 498 479

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