A company uses the weighted average method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. Compute the number of equivalent units produced by the department.
A) 181,500.
B) 165,000.
C) 173,500.
D) 145,000.
E) 187,000.

Question

Quizplus · Accepted Answer

The equivalent units produced are calculated by adding the equivalent units for the work done on the beginning inventory, the units completed and transferred out, and the work done on the ending inventory. The calculation is as follows:- Beginning inventory: 20,000 units * 40% = 8,000 equivalent units.- Units completed and transferred out: 165,000 units * 100% = 165,000 equivalent units (since they are fully completed).- Ending inventory: 22,000 units * 75% = 16,500 equivalent units.Adding these together: 8,000 + 165,000 + 16,500 = 189,500 equivalent units. However, since this option is not available, it seems there was a mistake in my calculation. Let's correct it:The correct calculation should not include the beginning inventory in the equivalent units directly since the question asks for the equivalent units produced during the period, which focuses on the work done during the period itself. Therefore, the correct calculation is:- Units completed and transferred out: 165,000 units (these are fully completed so they count as 165,000 equivalent units).- Work done on ending inventory: 22,000 units * 75% = 16,500 equivalent units.So, the correct calculation for equivalent units produced during the period is: 165,000 + 16,500 = 181,500 equivalent units.

A Company Uses the Weighted Average Method for Inventory Costing