Brody Corp.uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory for January consisted of 1,300 units that were 40% completed.13,000 units were started into the process during January.On January 31,the inventory consisted of 650 units that were 70% completed.What would be the equivalent units for direct materials cost using the weighted average method?
A)13,000
B)13,585
C)14,105
D)14,300

Question

Quizplus · Accepted Answer

Under the weighted average method, equivalent units for direct materials are calculated by adding the units completed and transferred out to the equivalent units in ending inventory. Since direct materials are added at the beginning, all units started are considered 100% complete for direct materials. Therefore, equivalent units for direct materials = (13,000 units started and completed) + (650 units in ending inventory) = 13,000 + 650 = 13,650. However, since the beginning inventory is also considered 100% complete for direct materials, the total equivalent units for direct materials is 13,000 (completed) + 1,300 (beginning inventory) = 14,300.