A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.
A) 6,500 units.
B) 5,500 units.
C) 9,000 units.
D) 13,000 units.
E) 10,500 units.

Question

Quizplus · Accepted Answer

To calculate the equivalent units of production using the weighted average method, we need to add the units completed during the month to the equivalent units of the ending work in process inventory. 
Equivalent units of production for direct materials = Units completed + (Units in ending work in process inventory x Percentage complete for direct materials)
Equivalent units of production for conversion costs = Units completed + (Units in ending work in process inventory x Percentage complete for conversion costs)
For direct materials: 8,000 + (5,000 x 50%) = 10,500
For conversion costs: 8,000 + (5,000 x 50%) = 10,500
Therefore, the equivalent units of production for the month using the weighted average method is 10,500 units.

A Production Department's Output for the Most Recent Month Consisted