Montoya Company manufactures polyurethane finish in a single production department. Production begins by blending various chemicals, initial cost, and ends by filling the containers. The containers are then transferred to the shipping department. Labor and overhead are added continuously throughout the process. Management has determined that 2% of good units is normal spoilage. Spoilage can be identified as soon as the chemicals are added. Factory overhead is applied at the rate of $3 per direct labor dollar.

	Costs
Work-in-process inventory, May 1
Direct Materials	$52,500
Direct Labor ($10 per hour)	8,500
May costs added:
Direct Materials	332,500
Direct Labor ($10 per hour)	38,500

	Units
Work-in-process inventory, May 1 (30% complete)	2,000
Transferred to Shipping Department	25,500
Work-in-Process Inventory, May 31 (70% complete)	5,500

Total equivalent units for materials under the FIFO 29,000 Total equivalent units for conversion under the FIFO 28,750 Cost per equivalent unit for materials under the FIFO $11.47 Cost per equivalent unit for conversion under the FIFO $5.36

What is the cost of completed units for the month of December? What is the cost of units in process as of December 31? What is the cost of units in ending inventory December 31?

A 29,000 B 28,750 C 11.47 D 5.36 Statement of Equivalent production Direct %comple Equivalent Materials tion Conversi%comple Equivalent Particulars Total mat on tion Conv Work-in-process inventory, May 1 Units started and completed- Units transferred 0% 70% 2,000.00 2,000.00 1,400.00 100% 100% 23,500.00 23,500.00 23,500.00 23,500.00 25,500.00 25,500.00 Work-in-Process 100% 70% Inventory, May 31 5,500.00 5,500.00 5,500.00 3,850.00 Equivalent Units 29,000.00 28,750.00 Current Month Costs 332,500.00 154,000.00 486,500.00 Cost per Equivalent units 11.47 5.36 16.82