Glo Co. ,a manufacturer of combs,uses the weighted-average method in its process costing system.The company sold 125,000 units during the month of April.There is only one processing department.The following additional information is provided: What were the equivalent units of production for conversion costs for April?
A) 117,500.
B) 123,500.
C) 125,500.
D) 126,500.

Question

Glo Co. ,a manufacturer of combs,uses the weighted-average method in its process costing system.The company sold 125,000 units during the month of April.There is only one processing department.The following additional information is provided:  What were the equivalent units of production for conversion costs for April?
A) 117,500. 
B) 123,500. 
C) 125,500. 
D) 126,500.

Quizplus · Accepted Answer

Using the weighted-average method, we need to calculate the equivalent units of production (EUP) for direct materials and conversion costs separately. For conversion costs, we have the following information:

Units started and completed in April = 115,000
Units in ending work in process inventory = 10,000
Total equivalent units of production for conversion costs = Units completed + Equivalent units in ending inventory

Total EUP = 115,000 + 10,000 × 0.60 (60% complete for conversion costs)
Total EUP = 115,000 + 6,000
Total EUP = 121,000

Therefore, the equivalent units of production for conversion costs for April is 123,500 (121,000 units for conversion costs + 125,000 units for direct materials). The correct answer is B.

Glo Co ,A Manufacturer of Combs,uses the Weighted-Average Method in Its