Super-Tech Industries had the following department information about physical units and percentage of completion: $\begin{array}{ll}
&\underline{\text { Physical Units }}\
\text { Work in process, June } 1(75 \%) & 2,000 \
\text { Completed and transferred out } & 4,500 \
\text { Work in process, June } 30(50 \%) & 3,000
\end{array}$
If materials are added at the beginning of the production process, what is the tatal number of equivalent units during June for conversion costs if the weighted-average method is used?
A)3,750
B)7,500
C)8,000
D)6,000

Question

Super-Tech Industries had the following department information about physical units and percentage of completion: $\begin{array}{ll}
&\underline{\text { Physical Units }}\
\text { Work in process, June } 1(75 \%) & 2,000 \
\text { Completed and transferred out  } & 4,500 \
\text { Work in process, June } 30(50 \%)  & 3,000
\end{array}$
If materials are added at the beginning of the production process, what is the tatal number of equivalent units during June for conversion costs if the weighted-average method is used?
A)3,750
B)7,500
C)8,000
D)6,000

Quizplus · Accepted Answer

The total number of equivalent units for conversion costs using the weighted-average method is calculated by adding the equivalent units for work in process at the beginning of the period, the physical units completed and transferred out, and the equivalent units for work in process at the end of the period. For conversion costs, the calculation is as follows:- Work in process, June 1: 2,000 units at 75% completion = 1,500 equivalent units- Completed and transferred out: 4,500 units at 100% completion = 4,500 equivalent units (since they are fully completed, their equivalent units for conversion costs are the same as their physical units)- Work in process, June 30: 3,000 units at 50% completion = 1,500 equivalent unitsAdding these together: 1,500 (beginning WIP) + 4,500 (completed and transferred out) + 1,500 (ending WIP) = 7,500 equivalent units. However, the beginning work in process should not be added again as its conversion costs are considered in the period it was started. Therefore, the correct calculation should only consider the units completed and transferred out and the ending work in process:- Completed and transferred out: 4,500 units- Ending WIP conversion: 3,000 units at 50% = 1,500 unitsTotal equivalent units for conversion costs = 4,500 + 1,500 = 6,000 units.

Super-Tech Industries Had the Following Department Information About Physical Units