Required

For the data in Exercise 5- 14, summarize total costs to account for, calculate cost per equivalent unit for direct materials and conversion costs, and assign total costs to units completed ( and transferred out) and to units in ending work in process.

Exercise 5- 14

aDegree of completion: direct materials, 80%; conversion costs, 35%.

bDegree of completion: direct materials, 80%; conversion costs, 80%.

Required

1. Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.

2. What issues should the manager focus on when reviewing the equivalent units calculation?

Physical Units (Watches) Direct Materials Conversion Costs Beginning work in process (May 1)* 100 $ 547,100 $ 141,600 Started in May 2013 510 Completed during May 2013 Ending work in process (May 31) Total costs added during May 2013 450 160 $3,585,600 $1,748,460