Fayard Corporation uses the weighted-average method in its process costing system.The Assembly Department started the month with 5,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs.An additional 67,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department.During the month 63,000 units were completed in the Assembly Department and transferred to the next processing department.There were 9,000 units in the ending work in process inventory of the Assembly Department that were 50% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?
A)71,000
B)64,000
C)63,000
D)67,500

Question

Quizplus · Accepted Answer

To calculate equivalent units for conversion costs, we need to take into account the degree of completion of beginning work in process inventory, units transferred in and ending work in process inventory.

Equivalent units for conversion costs = (Degree of completion of beginning WIP inventory * Number of units in beginning WIP inventory) + (Units transferred in + Units started and completed - Units transferred out) * 100% + (Degree of completion of ending WIP inventory * Number of units in ending WIP inventory)

= (0.70 * 5,000) + (67,000 + 63,000 - 67,000) * 100% + (0.50 * 9,000)

= 3,500 + 6,000 + 4,500

= 14,000

Therefore, the equivalent units for conversion costs in the Assembly Department for the month are 67,000 + 14,000 = 81,000, which means the closest answer is D) 67,500.

Fayard Corporation Uses the Weighted-Average Method in Its Process Costing