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FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data:

In Cutting, all direct materials are added at the beginning of the process.

Beginning work in process consisted of 41,000 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,215,000; direct labor, $222,000; and applied overhead, $150,000.

Costs added to production during the month were direct materials, $2,575,000; direct labor, $3,471,250. Overhead was assigned using the following information:

Activity Rate Actual Driver Usage

Inspection $150 per inspection hour 4,000 inspection hours

Maintenance $750 per maintenance hour 1,600 maintenance hours

Receiving $300 per receiving order 2,000 receiving orders

At the end of the month, 121,000 units were transferred out to Welding, leaving 14,000 units in ending work in process, or 25 percent complete.

Assume that the FIFO method is used. Required:

1. Prepare a physical flow schedule.

Swasey Fabrication, Inc. Physical Flow Schedule

Units to account for:

Units, beginning work in process

Units started (transferred in)

Total units to account for

Units accounted for:

Units completed and transferred out

Units, ending work in process

Total units accounted for

2. Calculate equivalent units of production for direct materials and conversion costs.

Equivalent Units:

Direct Materials

Conversion Costs

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