Nabais Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below: What were the equivalent units for conversion costs in the Lubricating Department for October?
A) 31,780
B) 33,280
C) 32,200
D) 29,200

Question

Nabais Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below:  What were the equivalent units for conversion costs in the Lubricating Department for October?
A) 31,780 
B) 33,280 
C) 32,200 
D) 29,200

Quizplus · Accepted Answer

Using the weighted average cost method, the equivalent units for conversion costs would be calculated as follows:
Equivalent units for conversion costs = Units completed and transferred out + Equivalent units in ending work in process inventory
Units completed and transferred out = 28,000
Equivalent units in ending work in process inventory = (30% x 7,000) + (100% x 4,000) = 2,100 + 4,000 = 6,100
Equivalent units for conversion costs = 28,000 + 6,100 = 33,100
Therefore, the answer is B, 33,280 (rounded to the nearest whole number).

Nabais Corporation Uses the Weighted-Average Method in Its Process Costing