Binsder Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 9,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. An additional 55,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 10,000 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) 54,000
B) 56,000
C) 59,000
D) 55,400

Question

Quizplus · Accepted Answer

To calculate the equivalent units for conversion costs, we need to consider the units that were started and completed in the Assembly Department during the month, as well as the units that are still in process (i.e., the ending work in process inventory).

Units started and completed in the Assembly Department = 55,000
Equivalent units of units in ending work in process inventory = 10,000 x 50% = 5,000

Total equivalent units for conversion costs = 55,000 + 5,000 = 60,000

However, we need to adjust for the beginning work in process inventory, which was only 40% complete with respect to conversion costs. So, the equivalent units for conversion costs in the Assembly Department for the month are:

Equivalent units for conversion costs = (55,000 + 5,000) x 100% + 9,000 x 40% = 59,000

Binsder Company Uses the Weighted-Average Method in Its Process Costing