Question
San Jose Inc. uses the FIFO method for its process costing system. For this problem assume the firm has only one department/process. All direct materials
San Jose Inc. uses the FIFO method for its process costing system. For this problem assume the firm has only one department/process. All direct materials are added when units are 40% complete with respect to conversion costs. Conversion costs are incurred evenly throughout production. The company started 120,000 units during May and had the following WIP inventory at the beginning and end of the month.
May 1, 15,000 units, 25% complete with respect to conversion costs
May 31, 12,000 units, 50% complete with respect to conversion costs Total equivalent units for May are (i.e. with respect to direct materials and conversion costs):
a. Direct Materials: 120,000; Conversion Costs: 125,250
b. Direct Materials: 135,000; Conversion Costs: 125,250
c. Direct Materials: 117,000; Conversion Costs: 122,250
d. Direct Materials: 132,000; Conversion Costs: 122,250
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