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Question - Dibbo Corp. uses the average process costing system. Material is added at the beginning of the production process and overhead is applied on the basis of direct labor. Records indicate that 70,000 units were in process at the beginning of May, 2017; these units were 35% complete as to conversion. In May, the company started 445,300 and completed 427,500 units. May's ending inventory was 30% complete as to conversion.
1. What are the equivalent units of production for direct materials?
2. What are the equivalent units of production for conversion?
Assume that Dibbo Corp. in No. 3 above uses the FIFO method of process costing, determine the equivalent units of production for labor and overhead.
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