Hoffman Company manufactures car seats in its Boise 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.

Data for the assembly department for October 2017 are as follows: 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

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

b Degree direct materials, ?%; conversion costs, 65%. 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	$2,816,7

1.	For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule.
2.	For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit.
3.	Assign total costs to units completed and transferred out and to units in ending work in process.
4.	Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method.
5.	Should Hoffman's managers choose the weighted-average method or the FIFO method? Explain briefly.

Requirement 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. (For amounts with a 0 balance, make sure to enter "0" in the appropriate cell.)

		Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Work in process beginning
Started during current period
To account for
Completed and transferred out during current period:
From beginning work in process
Started and completed
Work in process, ending
Accounted for
Equivalent units of work done in current period only

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