Garcia Company uses the weighted average method in its costing system. For the month of May in the Assembly Department, the equivalent units for conversion costs amounted to 35,000. There were 5,000 units in beginning work-in-process that were 50% complete. During the month, 33,000 units were started and 31,400 were completed and transferred. The ending work in process consists of
A) 5,000 units.
B) 7,000 units.
C) 3,600 units.
D) 6,600 units.

Question

Quizplus · Accepted Answer

The ending work in process consists of 6,600 units. This is calculated as follows:Beginning work in process: 5,000 units x 50% complete = 2,500 equivalent unitsUnits started during the month: 33,000 unitsTotal units to account for: 35,500 unitsUnits completed and transferred: 31,400 unitsEnding work in process: 35,500 units - 31,400 units = 4,100 unitsHowever, the ending work in process is also 20% complete with respect to conversion costs. Therefore, the equivalent units for conversion costs in the ending work in process are 4,100 units x 20% = 820 units.Total equivalent units for conversion costs: 35,000 unitsEquivalent units for conversion costs in ending work in process: 820 unitsPercentage of completion of ending work in process: 820 units / 35,000 units = 2.34%Therefore, the ending work in process consists of 31,400 units + (2.34% x 33,000 units) = 6,600 units.

Garcia Company Uses the Weighted Average Method in Its Costing