Company manufactures car seats in its plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at

Hoffman

Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Hoffman Company uses the FIFO method of process costing.

	Physical Units	Direct	Conversion
	(Car Seats)	Materials	Costs

Work in process, October 1a	4,000	$1,248,000	$241,650
Started during October 2017	22,500
Completed during October 2017	26,000
Work in process, October 31b	500
Total costs added during October 2017		$4,635,000	$2,575,125

aDegree of completion: direct materials, ?%; conversion costs, 45%.

bDegree of completion: direct materials, ?%; conversion costs, 65%.

	Direct	Conversion
		Materials	Costs
Costs incurred to date		$5,883,000	$2,816,775
Divide by equivalent units of work done to date		26,500	26,325
Cost per equivalent unit for work done to date		$222	$107

		Total	Direct	Conversion
		Production Costs	Materials	Costs
Completed and transferred out		$8,554,000	$5,772,000	$2,782,000
Work in process, ending		145,775	111,000	34,775
Total costs accounted for		$8,699,775	$5,883,000	$2,816,775