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Salmon Manufacturing Company uses a process costing system. Direct materials are added at the beginning of the process. During January, Department Q had a beginning inventory of 2,000 units, 25% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 60% complete for conversion costs.
-Using weighted average process costing, the equivalent units for direct material for the month were
A) 13,600
B) 14,000
C) 16,000
D) 15,600

Question

Quizplus · Accepted Answer

In weighted average process costing, equivalent units for direct materials are calculated by adding the units started and completed during the month to the units in ending inventory. Since direct materials are added at the beginning, all units started are considered 100% complete for direct materials. Therefore, the equivalent units for direct materials are 14,000 (units started) + 2,000 (beginning inventory) = 16,000.

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