Jersey Corporation has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was:
A) 25,000 units
B) 34,000 units
C) 35,000 units
D) 40,000 units

Question

Quizplus · Accepted Answer

To find the number of units started during the month, we need to use the following formula:
Units started = Units completed - Beginning work in process inventory + Ending work in process inventory

We already know the ending work in process inventory of conversion costs (10,000 units, 75% complete). To find the units completed for conversion costs, we need to calculate the equivalent units for conversion costs of the units completed (which would include the beginning work in process inventory).

Equivalent units for conversion costs of beginning work in process inventory = 15,000 units x 60% = 9,000 units
Equivalent units for conversion costs of units started and completed during the month = (47,500 units - 15,000 units) = 32,500 units
Equivalent units for conversion costs of ending work in process inventory = 10,000 units x 75% = 7,500 units
Total equivalent units for conversion costs = 9,000 units + 32,500 units + 7,500 units = 49,000 units

Using the formula above: Units started = Units completed - Beginning work in process inventory + Ending work in process inventory
Units started = 49,000 units - 15,000 units + 10,000 units
Units started = 35,000 units

Therefore, the best choice is C) 35,000 units.

Jersey Corporation Has a Process Costing System in Which It