The Rugger Company uses a process costing system. During the period, 500 units were in beginning inventory,1,400 were started and 1,000 units were completed and transferred out. The beginning work in process was 20% complete and the ending work in process units were 60% complete. Materials are added at the beginning of the process and conversion costs are added evenly throughout production. Beginning WIP had $8,950 of materials costs and $860 of conversion costs. The cost of materials added during the current period amounted to $29,050; the conversion costs added during the current period amounted to $34,560.
- What were the equivalent units of production for materials, using the weighted-average method?
A) 1,900
B) 1,540
C) 1,400
D) 1,440

Question

Quizplus · Accepted Answer

The equivalent units of production for materials, using the weighted-average method, are calculated as the sum of units completed and transferred out plus the equivalent units in ending work in process. Since materials are added at the beginning of the process, all units, regardless of their stage of completion, are considered 100% complete for materials. Therefore, the equivalent units for materials are the total units started during the period (1,400) plus the beginning inventory (500), which equals 1,900 units.

The Rugger Company Uses a Process Costing System