A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning Work in Process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.
A) 15,000 units.
B) 10,700 units.
C) 10,300 units.
D) 10,000 units.
E) 15,300 units.

Question

Quizplus · Accepted Answer

The weighted average method assigns costs to units based on the percentage of completion of the units in ending Work in Process inventory. In this case, the units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. This means that the equivalent units of production for direct materials and conversion costs are both 5,000 units (10,000 units x 50%). The equivalent units of production for the month are therefore 10,000 units (10,000 units completed and transferred to the next stage of production + 5,000 equivalent units of production in ending Work in Process inventory).

A Production Department's Output for the Most Recent Month Consisted