Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 14

When using the weighted-average method of process costing, total equivalent units produced for a given period equal:

a.The number of units started and completed during the period plus the number of units in beginning work in process plus the number of units in ending work in process.

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b.The number of units in beginning work in process plus the number of units started during the period plus the number of units remaining in ending work in process times the percentage of work necessary to complete the items.

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c.The number of units in beginning work in process times the percentage of work necessary to complete the items plus the number of units started and completed during the period plus the number of units started this period and remaining in ending work in process times the percentage of work necessary to complete the items.

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d.The number of units transferred out during the period plus the number of units remaining in ending work in process times the percentage of work necessary to complete the items.

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e.None of these.

Step 1 of 6

The weighted average method allocates cost to goods on average of the costs and hence, costs incurred in earlier period also form a part of the cost of goods produced or completed in the current period. As per weighted average method, the production completed in earlier period does not matter. In weighted average method, the entire production is considered to be produced in the current period.

Therefore, when using the weighted average method of process costing, total equivalent units produced for a given period equal the number of units transferred out during the period plus the number of units remaining in ending work in process times the percentage of work completed in the items.