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Springfield Springmakers, Inc. use process costing to determine the cost of inventory. It uses the FIFO method . The firm has the following inventory amounts.

Springfield Springmakers, Inc. use process costing to determine the cost of inventory. It uses the FIFO method. The firm has the following inventory amounts.

Direct Materials Conversion Costs
BWIP physical units (March 1) 50 50
BWIP percent completion 50% 75%
Units completed in March 500 500
EWIP physical units (March 31) 50 50
EWIP percent completion 25% 25%

In March, the firm incurred $50,000 in direct material costs and $75,000 in conversion costs.

Which of the following shows the total equivalent units for direct materials and conversion costs?

a.

Direct Materials: 487.5 equivalent units Conversion Costs: 475 equivalent units

b.

Direct Materials: 500 equivalent units Conversion Costs: 500 equivalent units

c.

Direct Materials: 500 equivalent units Conversion Costs: 475 equivalent units

d.

Direct Materials: 500 equivalent units Conversion Costs: 487.5 equivalent units

  1. 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: 132,000; Conversion Costs: 122,250

    b.

    Direct Materials: 120,000; Conversion Costs: 125,250

    c.

    Direct Materials: 135,000; Conversion Costs: 125,250

    d.

    Direct Materials: 117,000; Conversion Costs: 122,250

  2. A firm uses the FIFO method for process costing. It has 297 units in beginning WIP inventory at 36% complete with respect to conversion costs. It starts 23,703 units during the period and has 961 units in ending inventory (these units are 42% complete with respect to conversion costs). All direct materials are added at the beginning of the process.

    What are total equivalent units with respect to direct materials?

  3. A firm uses the FIFO method for process costing. It has 488 units in beginning WIP inventory at 36% complete with respect to conversion costs. It starts 13,986 units during the period and has 122 units in ending inventory (these units are 12% complete with respect to conversion costs). All direct materials are added at the beginning of the process.

    What are total equivalent units with respect to conversion costs (round final answer to the nearest unit, for this question only)?

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