Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300.
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Calculate the equivalent units of materials.
A) 250,000
B) 342,000
C) 317,000
D) 333,000
E) 294,000

Question

Quizplus · Accepted Answer

To calculate the equivalent units of materials using the weighted-average method, we need to consider the units in beginning inventory, units started and completed, and units in ending inventory. For each of these units, we need to calculate the equivalent units of materials.

Equivalent units of materials for beginning inventory: 
80,000 x 60% = 48,000

Equivalent units of materials for units started and completed: 
250,000

Equivalent units of materials for ending inventory: 
30,000 x 40% = 12,000

Total equivalent units of materials: 
48,000 + 250,000 + 12,000 = 310,000

We can then add the equivalent units of materials for the beginning work in process to get the total equivalent units of materials: 
310,000 + $37,200 = $646,800

Therefore, the equivalent units of materials is 342,000 (choice B).

Richards Corporation Uses the Weighted-Average Method of Process Costing