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A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning Work in Process inventory; 10,000 units were started into production in January; and there were 4,000 units that were 60% complete in the ending Work in Process inventory at the end of January.The weighted-average method is used.
-What were the equivalent units of production for conversion costs for the month of January?
A)8,400 equivalent units
B)14,000 equivalent units
C)10,000 equivalent units
D)12,400 equivalent units

Question

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A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning Work in Process inventory; 10,000 units were started into production in January; and there were 4,000 units that were 60% complete in the ending Work in Process inventory at the end of January.The weighted-average method is used.
-What were the equivalent units of production for conversion costs for the month of January?
A)8,400 equivalent units
B)14,000 equivalent units
C)10,000 equivalent units
D)12,400 equivalent units

Quizplus · Accepted Answer

The equivalent units of production for conversion costs are calculated by adding the fully completed units to the equivalent units in the ending Work in Process inventory. Here, 6,000 units were fully completed (10,000 started - 4,000 still in process), and the 4,000 units in process are 60% complete for conversion costs, equating to 2,400 equivalent units (4,000 units * 60%). Therefore, the total equivalent units for conversion costs are 8,400 (6,000 fully completed + 2,400 from the ending inventory).

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