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Monette Company manufactures car seats in its Seattle plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Monette Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Monette Company uses the FIFO method of process costing. Data for the assembly department for October 2013 are as follows:

	Physical Units (Car Seats)		Direct Materials		Conversion Costs
Work in process, October 1 (a)	5,000		$1,480,000		$483,000
Started during October 2013	23,000
Completed during October 2013	26,000
Work in process, October 31 (b)	2,000
Total costs added during October 2013			$4,876,000		$2,597,000
(a) Degree of completion: direct materials, ?%; conversion costs, 60%.
(b) Degree of completion: direct materials, ?%; conversion costs, 75%.

Direct Materials Conversion Costs

Costs incurred to date $6,356,000 $3,080,000

Divide by: Equivalent units of work done to date 28,000 27,500

Cost per equivalent unit for work done to date $227 $112

Required

1.	For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule.
2.	For each cost category, summarize total assembly department costs for October 2013 and calculate the cost per equivalent unit.
3.	Assign total costs to units completed and transferred out and to units in ending work in process.
4.	Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method.
5.	Should Monette's managers choose the weighted-average method or the FIFO method? Explain briefly.

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