The following information is provided: Materials and conversion are incurred uniformly throughout the process.
What would be the equivalent units of production for conversion when using the weighted average method?

A)17,400
B)18,600
C)21,000
D)22,000

Question

The following information is provided: Materials and conversion are incurred uniformly throughout the process.
What would be the equivalent units of production for conversion when using the weighted average method?

A)17,400 
B)18,600 
C)21,000 
D)22,000

Quizplus · Accepted Answer

The weighted average method takes into account the work done on units started during the current period and the work done on units in ending inventory. The equivalent units of production for conversion is calculated by multiplying the units completed and transferred out (18,000) by the percentage of conversion work completed (100%), i.e. 18,000 x 100% = 18,000. For the units in ending inventory, we need to calculate the percentage of conversion work completed, which is 50% for materials and 60% for conversion. Therefore, the equivalent units of production for conversion for the units in ending inventory is calculated by multiplying the number of units in ending inventory (1,200) by the percentage of conversion work completed (60%), i.e. 1,200 x 60% = 720. The total equivalent units of production for conversion is the sum of the equivalent units for completed and transferred out units plus the equivalent units for units in ending inventory, i.e. 18,000 + 720 = 18,720. Therefore, the answer is B (18,600).

The Following Information Is Provided: Materials and Conversion Are Incurred