ABC chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,700 chairs. During the month, the firm completed 78,500 chairs, and transferred them to the Finishing Department. The firm ended the month with 11,200 chairs in ending inventory. There were 16,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used. Beginning work in process was 20% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs. Beginning inventory:
Direct materials $24,800
Conversion costs $35,900
Manufacturing costs added during the accounting period:
Direct materials $168,200
Conversion costs $278,400
1. Compute equivalent units for direct materials and conversion costs.
2. Calculates cost per equivalent unit of work done to date.
3. Assign costs to units completed and to units in ending work-in-process inventory.