Tript Corporation has a process costing system and uses the weighted-average method. The company had 3,000 units in work in process on February 1 that were 60% complete with respect to conversion costs. During the month, 10,000 units were completed. At the end of the month, 4,000 units remained in work in process that were 40% complete with respect to conversion costs. Materials are added at the beginning of the process.The equivalent units for February for conversion costs were:
A) 9,800
B) 11,200
C) 12,800
D) 11,600

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs can be calculated as follows: Units completed (10,000 units) fully processed with respect to conversion costs, plus the work done on the beginning work in process (WIP) inventory (3,000 units at 60% complete), plus the work done on the ending WIP inventory (4,000 units at 40% complete). This calculation is: (10,000 * 100%) + (3,000 * 60%) + (4,000 * 40%) = 10,000 + 1,800 + 1,600 = 13,400. However, the correct calculation should consider the units completed and the progress made on the units in process at the beginning and the end of the period. The correct calculation is: 10,000 + (3,000 * 40%) + (4,000 * 40%) = 10,000 + 1,200 + 1,600 = 12,800. It appears there was a mistake in my explanation. The correct calculation for equivalent units for conversion costs considering the weighted-average method should include the completion of beginning WIP and the work done on ending WIP. Let's correct that: For the beginning WIP, we consider the work needed to complete them, and for the ending WIP, we consider the percentage completed during the period. The correct calculation is: Completed units: 10,000 units (fully completed, so 100% of conversion costs are considered). Plus, Beginning WIP: 3,000 units were 60% complete at the start, so they needed 40% more work to complete during February. Ending WIP: 4,000 units are 40% complete at the end of February. Therefore, the calculation is: (10,000 * 100%) + (3,000 * 40%) + (4,000 * 40%) = 10,000 + 1,200 + 1,600 = 12,800. The correct answer should reflect the calculation for equivalent units based on the work needed to complete the units in process at the beginning and the work done on the units in process at the end, specifically for conversion costs. My initial explanation contained an error in the calculation process. The correct approach to calculate equivalent units for conversion costs in a weighted-average method involves accounting for the completion percentage of both the beginning and ending work in process inventory, focusing on the conversion efforts.

Tript Corporation Has a Process Costing System and Uses the Weighted-Average