Question

Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).Units started in May 225,000 Units completed in May 200,000 Work in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).Costs incurred in May Direct materials $ 342,000 Conversion costs $ 352,950 If Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for direct materials and conversion respectively for May.a. 150,000 materials; 150,000 conversion.b. 195,000 materials; 195,000 conversion.c. 275,000 materials; 215,000 conversion.d. 195,000 materials; 225,000 conversion.e. 225,000 materials; 195,000 conversion.

Answer 1

Answer:

e. 225,000 materials; 195,000 conversion.

Explanation:

direct materials

beginning WIP inventory = 0%*50000

                                          = 0

started and completed = 150000*100%

                                       = 150000

ending WIP inventory = 75000*100%

                                    = 75000

equivalent units = 0 + 150000 + 75000

                           = 225000

conversion

beginning WIP inventory = 50000*60%

                                          = 30000

started and completed = 150000*100%

                                       = 150000

ending WIP inventory = 75000*20%

                                    = 15000

equivalent units = 30000 + 150000 + 15000

                           = 195000

Therefore, The equivalent units for direct materials and conversion respectively for May is $225,000 and $195,000 respectively.