Consider the following data for the assembly division of Stiles Watches, Inc.:

The assembly division uses the weighted-average method of process costing.

Dialog content starts

	Physical Units (Watches)	Direct Materials	Conversion Costs
Beginning work in process (May 1)a	60	$552,000	$144,000
Started in May 2013	530
Completed during May 2013	450
Ending work in process (May 31)b	140
Total costs added during May 2013		$3,586,300	$1,754,600

aDegree of completion: direct materials, 80%; conversion costs, 35%.

bDegree of completion: direct materials, 40%; conversion costs, 70%.

Requirements

1.	Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.
2.	What issues should the manager focus on when reviewing the equivalent units calculation?