Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: What are the equivalent units for conversion costs for the month in the first processing department?
A) 8,400
B) 8,970
C) 570
D) 10,300

Question

Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:  What are the equivalent units for conversion costs for the month in the first processing department?
A) 8,400 
B) 8,970 
C) 570 
D) 10,300

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by adding together the equivalent units for each unit completed and transferred out and the equivalent units for partially completed units in ending work in process inventory. From the data given in the table, we can see that 45,000 units were started and completed during the month, so their conversion costs are fully accounted for. The number of partially completed units in ending work in process inventory is 3,000. To calculate the equivalent units for conversion costs, we need to multiply the percentage completion of these units (100% for materials and 50% for conversion) by the number of units. This gives us: 3,000 * 50% = 1,500 equivalent units for conversion costs. Adding this to the 7,470 equivalent units for the completed and transferred out units gives us a total of 8,970 equivalent units for conversion costs for the month in the first processing department. Therefore, the correct answer is B.

Inacio Corporation Uses the Weighted-Average Method in Its Process Costing