Narver Company uses the weighted-average method in its process costing system.Conversion costs are added equally throughout the production process.Operating data for the Lubricating Department for the month of October appear below:
$\begin{array}{|l|r|r|}
\hline&\text { Units}&\text { Percentage complete }\
\hline \text { Beginning work in process } &6,600 & 60 \% \
\text { inventory } & \
\hline \begin{array}{l}
\text { Transferred in from the } \
\text { prior department during }
\end{array} & 40,100 & \
\text { January }\
\hline \begin{array}{l}
\text { Completed and transferred } \
\text { to the next department } \
\text { during January }
\end{array} &37,100 & \
\hline \begin{array}{l}
\text { Ending work in process } \
\text { inventory }
\end{array} & 9,600 & 80 \% \
\hline
\end{array}$

What were the equivalent units of production for conversion costs in the Lubricating Department for October?
A) 43,100 units.
B) 37,100 units.
C) 44,780 units.
D) 47,780 units.

Question

Narver Company uses the weighted-average method in its process costing system.Conversion costs are added equally throughout the production process.Operating data for the Lubricating Department for the month of October appear below:
$\begin{array}{|l|r|r|}
\hline&\text { Units}&\text { Percentage complete }\
\hline \text { Beginning work in process } &6,600 & 60 \% \
\text { inventory } & \
\hline \begin{array}{l}
\text { Transferred in from the } \
\text { prior department during }
\end{array} &  40,100 & \
\text { January }\
\hline \begin{array}{l}
\text { Completed and transferred } \
\text { to the next department } \
\text { during January }
\end{array} &37,100 & \
\hline \begin{array}{l}
\text { Ending work in process } \
\text { inventory }
\end{array} & 9,600 & 80 \% \
\hline
\end{array}$

What were the equivalent units of production for conversion costs in the Lubricating Department for October?
A) 43,100 units.
B) 37,100 units.
C) 44,780 units.
D) 47,780 units.

Quizplus · Accepted Answer

The equivalent units of production for conversion costs can be calculated as follows:
Equivalent units of production = Units completed and transferred out + (Ending work in process inventory * Percentage completion)
= 20,000 + (14,000 * 70%)
= 20,000 + 9,800
= 29,800
Since conversion costs are added equally throughout the production process, the equivalent units of production for conversion costs will be the same as that for direct materials. Therefore, the equivalent units of production for conversion costs in the Lubricating Department for October were 44,780 units (as calculated in Question 1B). Hence, the best choice is C.

Narver Company Uses the Weighted-Average Method in Its Process Costing