For units that are completed and transferred out in a firm that uses the weighted average method of process costing:
A)the number of units that came from beginning inventory is the same as the number of units that were started during the period.
B)the number of equivalent units for direct materials is the same as the number of equivalent units for conversion cost.
C)the number of equivalent units is less than the number of physical units.
D)the number of equivalent units is more than the number of physical units.

Question

Quizplus · Accepted Answer

In the weighted average method of process costing, the number of equivalent units for direct materials and the number of equivalent units for conversion costs (labor and overhead) can be the same for units completed and transferred out, as they are both calculated based on the work done during the period plus the work needed to complete the beginning inventory. This does not necessarily hold true for every case, as it depends on the point at which materials are added and how conversion costs are incurred, but it is a possibility and thus the most accurate choice given. Choices A, C, and D are not inherently true about the weighted average method.

For Units That Are Completed and Transferred Out in a Firm