Question

Carina Medical Supplies manufactures syringes and other medical supplies. Direct materials are added at the beginning of the process, and conversion costs are incurred evenly throughout production. No WIP inventory existed on February 1. The total manufacturing costs for the syringe manufacturing departments during February were:
Direct materials ...... $360,000
Conversion costs ...... 380,000
Total costs ......... $740,000

REQUIRED
A. Suppose 200,000 units were started and completed in February. Calculate the equivalent unit costs for direct materials and conversion costs and the total cost per equivalent unit.
B. Now suppose 200,000 units were started, but 20,000 units remained in WIP at the end of February. These units were 100% complete with respect to direct materials, but only 50% complete for conversion costs. Calculate the equivalent unit costs for direct materials and conversion costs and the total cost per equivalent unit.
C. Explain why the answers in part A and part B are different.



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  • CreatedJanuary 26, 2015
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