An organization follows the Weighted-Average method for inventory valuation. For a particular period, 1,000 units were already under process at the beginning of the period, and 9,000 units were started during the period. At the end of the period, 7,000 units were completed. The nature of the process was set up such that Direct Material (DM) and Conversion Costs (CC) accrue evenly throughout the process. The Ending Work-in-Progress (WIP) Inventory of the process was one-third complete with respect to both DM and Conversion Costs. Find the equivalent units of DM to be completed in the next period. (Round units to whole number.)
A) 1,000 units
B) 2,000 units
C) 3,000 units
D) 7,000 units

Question

Quizplus · Accepted Answer

Units in Ending WIP Inventory = Units Already in Process at the Beginning of the Period + New Units Started During the Period - Units Completed in the Period = 1,000 units + 9,000 units - 7,000 units = 3,000 units
DM in ending WIP Inventory is 33.33% (one-third) completed during the period, and therefore 66.67% (two-thirds) has to be completed in the next period.
Therefore, 3,000 units × 66.67% of DM are to be completed during the next period. So, 3,000 units × 66.67% = 2,000 units are to be completed next period.

An Organization Follows the Weighted-Average Method for Inventory Valuation