EB5.
LO 5.3Using the weighted-average method, compute the equivalent units of production if the beginning inventory consisted of 20,000 units, 55,000 units were started in production, and 57,000 units were completed and transferred to finished goods inventory. For this process, materials are 70% complete and the units are 30% complete with respect to conversion.

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khaqanelahi khaqanelahi · Answer 1 · 2020-01-11T13:10:54+01:00

Answer:

The total amount of equivalent units for materials and conversion are 69.600 units and 62,400 units respectively.

Explanation:

(It is assume that both opening and ending inventory materials are 70% complete and the units are 30% complete with respect to conversion.)

Calculation of Material equivalent units

Closing units = 20,000 + 55,000 - 57,000 = 18,000

In weighted average period cost for material include both cost of opening stock material and cost of material incurred in the period.

Eq material = 20,000 + 55,000 - (18,000*30%) = 69,600units

(opening units losts it identity)

Calculation of Conversion Cost equivalent units

Eq conversion cost = 20,000 + 55,000 - (18000 *%70)

= 62,400 units