Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.What are the equivalent units for conversion costs for the month in the first processing department?
A) 9,300
B) 8,065
C) 7,400
D) 665

Question

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were:  A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.What are the equivalent units for conversion costs for the month in the first processing department?
A) 9,300 
B) 8,065 
C) 7,400 
D) 665

Quizplus · Accepted Answer

To calculate equivalent units for conversion costs, we need to consider both the units started and the ending inventory.

Units started = 8,500

For ending inventory:
- Materials are 50% complete, so we ignore this and only consider conversion costs.
- Conversion costs are 35% complete, so we multiply the ending inventory units (800 * 50%) by 35% to get equivalent units for conversion costs: 280

Total equivalent units for conversion costs = units started + equivalent units for ending inventory = 8,500 + 280 = 8,780

Therefore, the correct answer is B) 8,065.

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