Use the following to answer questions:
Diamond Company has a process costing system using the weighted-average cost flow method. All
materials are introduced at the beginning of the process in Department 1. The following information is
available for the month of January:

-The number of equivalent units of production for material costs for the month of January is:
A) 28,000
B) 23,200
C) 24,000
D) 22,000

Question

Use the following to answer questions:
Diamond Company has a process costing system using the weighted-average cost flow method. All
materials are introduced at the beginning of the process in Department 1. The following information is
available for the month of January:
 
-The number of equivalent units of production for material costs for the month of January is:
A) 28,000 
B) 23,200 
C) 24,000 
D) 22,000

Quizplus · Accepted Answer

The number of equivalent units of production for material costs for the month of January is 28,000. This is because the beginning work in process inventory was 100% complete with respect to material costs, and the units started and completed during the month were also 100% complete with respect to material costs. The ending work in process inventory was 60% complete with respect to material costs, so the equivalent units of production for material costs for the ending work in process inventory is 60% of 4,000 units, or 2,400 units. Therefore, the total number of equivalent units of production for material costs for the month of January is 10,000 units (beginning work in process inventory) + 16,000 units (units started and completed during the month) + 2,400 units (ending work in process inventory) = 28,000 units.

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