In the second quarter of its operation, Ding Dong Company has a beginning Work-in-Progress (WIP) Inventory of 700 units that were 100% complete for Direct Materials (DM) and 40% complete for Conversion Costs (CC). During the period, the company started 3,300 new units and a total of 3,000 units were completed and removed from WIP Inventory. At the end of the period, they had 1,000 units in ending inventory that were 100% complete with respect to Direct Materials and 60% complete with respect to Conversion Costs. If the company follows the Weighted-Average method of costing, then find the total equivalent units of Conversion Costs for the second quarter.
A) 2,600 units
B) 3,000 units
C) 3,600 units
D) 4,400 units

Question

Quizplus · Accepted Answer

Total Equivalent Units of Conversion Costs, according to Weighted-Average = (Units Completed and Removed from WIP Inventory × Percentage of Resource Added to Date) + (Units in Ending WIP Inventory × Percentage of Resource Added to Date).
Therefore, (3,000 units × 100%) + (1,000 units × 60%) = 3,000 units + 600 units = 3,600 units.

In the Second Quarter of Its Operation, Ding Dong Company