The Nichols Company uses the weighted-average method in its process costing system.The company recorded 29,500 equivalent units of production for conversion costs for November in a particular department.There were 6,000 units in the ending work in process inventory on November 30,75% complete with respect to conversion costs.The November 1 work in process inventory consisted of 8,000 units,50% complete with respect to conversion costs.A total of 25,000 units were completed and transferred out of the department during the month.The number of units started during November in the department was?
A) 21,000 units.
B) 23,000 units.
C) 24,500 units.
D) 27,000 units.

Question

Quizplus · Accepted Answer

Equivalent units of production for conversion costs in November = Units completed + (Ending WIP units x % complete) – (Beginning WIP units x % complete)
29300 = 25000 + (6000 x 0.75) - (8000 x 0.50)

The units started during November in the department can be calculated as follows:

Units started = Equivalent units of production for conversion costs – Units completed – Ending WIP units
Units started = 29300 - 25000 - 6000(0.75)
Units started = 23000 units.

Therefore, the answer is B) 23,000 units.

The Nichols Company Uses the Weighted-Average Method in Its Process