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Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.

Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).

Units started in May 225,000
Units completed in May 200,000

Work in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).

Costs incurred in May
Direct materials $342,000
Conversion costs $352,950

If Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for materials and conversion costs respectively for May.

Sagot :

anthougo

Answer:

Pitts Enterprises

                                               Materials        Conversion

The equivalent units =           225,000            195,000

Explanation:

a) Data and Calculations:

                                           Units    Materials        Conversion       Total

Work in Process, May 1    50,000       100%               40%

Units started in May      225,000

Units completed            200,000

Work in Process, May 31  75,000      100%               20%

Costs of Work in Process                $70,500         $34,050       $104,550

Costs incurred in May                      342,000          352,950        694,950

Equivalent units:

                                           Units    Materials        Conversion

Work in Process, May 1    50,000       0 (100%)         30,000 (60%)

Units started and

 completed in May        150,000  150,000 (100%)  150,000 (100%)

Work in Process, May 31 75,000    75,000 (100%)    15,000 (20%)

Total equivalent units                   225,000              195,000

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