FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost AssignmentMason, Durant, and Santos $($MDS$)$ is a tax services firm. The firm is located in Oklahoma City and employs $15$ professionals and eight staff. The firm does tax work for

small businesses and well$-$to$-$do individuals. The following data are provided for the last fiscal year. $($The Mason, Durant, and Santos fiscal year runs from July $1$ through

June $30.)$

Returns processed

Returns in process, beginning of year

Returns in process, end of year

Cost of services sold

Beginning direct materials inventory

Purchases, direct materials

Direct labor

Overhead

Administrative expenses

Selling expenses

$3,000$

$43,000$

$12,000$

$$1,581,000$

$20,000$

$40,000$

$1,400,000$

$100,000$

$258,000$

$65,000$Calculate equivalent units of production for direct materials and conversion costs.

Equivalent Units

Direct Materials

Conversion Costs

Compute unit cost. Round unit costs & final answer to three decimal places.

$

$$ per unit

Calculate the cost of goods transferred to Welding at the end of the month. In your calculations, round unit costs to three decimal places. Round your final

answer to the nearest dollar.

$

$x$

Calculate the cost of ending inventory. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar.

$

$x$

Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data:

In Cutting, all direct materials are added at the beginning of the process.

Beginning work in process consisted of $40,000$ units, $20$ percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $$1,215,000$; direct labor, $$223,000$; and applied overhead, $$150,000.$

Costs added to production during the month were direct materials, $$2,575,000$; direct labor, $$3,471,250.$ Overhead was assigned using the following information:

Activity Rate Actual Driver Usage

Inspection $$150$ per inspection hour $4,000$ inspection hours

Maintenance $$750$ per maintenance hour $1,600$ maintenance hours

Receiving $$300$ per receiving order $2,000$ receiving orders

At the end of the month, $121,000$ units were transferred out to Welding, leaving $14,000$ units in ending work in process, or $25$ percent complete.

Assume that the FIFO method is used.