A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor.These beginning units were completed and another 90,000 units were started during the current period.Of those started,60,000 were finished and the remaining 30,000 were 40% complete at the end of the period.Using the weighted-average method,the equivalent units of production with regard to direct labor were:
A)88,000.
B)74,000.
C)76,000.
D)92,000.
E)96,000.

Question

Quizplus · Accepted Answer

To calculate the equivalent units of production using the weighted-average method, we need to take into account both the units that were started and completed during the period, as well as the units that are still in process at the end of the period.

For units that were completed during the period, we count them as fully complete, so we include all 60,000 units in the calculation.

For units that are still in process at the end of the period, we need to calculate the equivalent units of production based on their degree of completion. In this case, we have 30,000 units that are 40% complete with respect to direct labor, so we count them as 30,000 x 0.4 = 12,000 equivalent units.

To calculate the equivalent units of production for the beginning Work in Process inventory, we need to first convert the 20% completion to equivalent units. Since 20% represents one-fifth of the direct labor required to complete the units, we can take 20% of the 20,000 units to get 4,000 equivalent units.

Therefore, the total equivalent units of production for direct labor is:

60,000 units + 12,000 units + 4,000 units = 76,000 units

Therefore, the answer is D) 92,000.

A Company's Beginning Work in Process Inventory Consisted of 20,000