A company uses a process costing system.Its Weaving Department completed and transferred out 120,000 units during the current period.The ending inventory in the Weaving Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to conversion costs). Determine the equivalent units of production for the Weaving Department for direct materials and conversion costs assuming the weighted average method.
A)120,000;120,000
B)120,000;160,000
C)128,000;120,000
D)128,000;144,000
E)128,000;184,000

Question

Quizplus · Accepted Answer

For direct materials:
Equivalent units of production = Units completed and transferred out + Ending inventory in process * Percentage complete
= 120,000 + 40,000 * 20%
= 128,000

For conversion costs:
Equivalent units of production = Units completed and transferred out + Ending inventory in process * Percentage complete
= 120,000 + 40,000 * 60%
= 144,000

Therefore, the equivalent units of production for direct materials and conversion costs are 128,000 and 144,000 respectively, which are only found in option D.

A Company Uses a Process Costing System