Question

Use this information about Carmelita Inc. to answer the question that follow. Carmelita Inc. has the following information available: Costs from Beginning Inventory $5,100 Costs from Current Period $26,800 Direct materials Conversion costs 5,500 142,400 At the beginning of the period, there were 600 units in process that were 44% 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 24% 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 Ca. 5,032 for direct materials and 5,000 for conversion costs Ob. 5,000 for direct materials and 5,032 for conversion costs Oc. 4,600 for direct materials and 5,032 for conversion costs Od. 5,032 for direct materials and 5,032 for conversion costs

Answer 1

Solution:

Carmelita Inc.
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	600
Units started this period	5000
Total unit to be accounted for	5600
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 56%	600	0	336
Started and completed currently	4600	4600	4600
Transferred to finished goods	5200	4600	4936
Units in ending WIP Material - 100% Conversion - 24%	400	400	96
Total units accounted for	5600	5000	5032

Hence option b is correct.