Reference: 04-06
The information below was obtained from the records of the first processing department of Christine Corporation for the month of July. The company uses the weighted-average method in its process costing system. $$\begin{array} { | l | l | l | }
\hline & \text { Units } & \begin{array} { l }
\text { Labour and Overhead } \
\text { (Percentage Complete) }
\end{array} \
\hline \text { Work in process inventory, July 1 } & 20,000 & 40 \% \
\hline \text { Started during the month } & 70,000 & \
\hline \text { Completed during the month } & 80,000 & \
\hline \text { Work in process inventory, July 31 } & ? & 25 \% \
\hline
\end{array}$$ All materials are added at the beginning of the manufacturing process.
-The equivalent units of production for labour and overhead for the month are
A)70,000 units.
B)90,000 units.
C)82,500 units.
D)80,000 units.

Question

Reference: 04-06
The information below was obtained from the records of the first processing department of Christine Corporation for the month of July. The company uses the weighted-average method in its process costing system. $$\begin{array} { | l | l | l | } 
\hline & \text { Units } & \begin{array} { l } 
\text { Labour and Overhead } \
\text { (Percentage Complete) }
\end{array} \
\hline \text { Work in process inventory, July 1 } & 20,000 & 40 \% \
\hline \text { Started during the month } & 70,000 & \
\hline \text { Completed during the month } & 80,000 & \
\hline \text { Work in process inventory, July 31 } & ? & 25 \% \
\hline
\end{array}$$ All materials are added at the beginning of the manufacturing process.
-The equivalent units of production for labour and overhead for the month are
A)70,000 units.
B)90,000 units.
C)82,500 units.
D)80,000 units.

Quizplus · Accepted Answer

To calculate the equivalent units of production for labor and overhead using the weighted-average method, we consider both the work completed during the month and the work in process at the end of the month. The calculation is as follows:- Completed during the month: 80,000 units (these are 100% complete for labor and overhead).- Work in process at the end of the month: The remaining 10,000 units (90,000 started - 80,000 completed = 10,000 not completed) are 25% complete for labor and overhead. Therefore, equivalent units for these are 10,000 units * 25% = 2,500 units.Adding these together: 80,000 units (completed) + 2,500 units (WIP at 25%) = 82,500 equivalent units for labor and overhead.

Reference: 04-06 the Information Below Was Obtained from the Records

Reference: 04-06
the Information Below Was Obtained from the Records