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MC Qu. 91 A production department's... A production department's output for the most recent month consisted of 13,500 units completed and transferred to the next stage of production and 13,500 units in ending Work in Process inventory. The units in ending Work in Process inventory were 60% complete with respect to both direct materials and conversion costs. There were 1,700 units in beginning Work in Process inventory, and they were 80% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

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Answer:

Calculation of the equivalent units of production for the month, assuming the company uses the weighted average method.

                                  Completed and Transfered       Ending WIP     Equiv Units

Direct Materials                    13500                                   8100              21600

Conversion Costs                 13500                                   8100             21600

Therefore Total Equivalent Units in terms of :

Direct Materials = 21600

Conversion Costs = 21600

Explanation:

The concept of eqivalent units is used to match the process cost to the actual degree of completion of output of that same process.

For this Process the Outputs were:

             Units Completed and Transfered

             Ending Work In Progress

In terms of Direct Materials the Equivalent units were calculated as

             Units Completed and Transfered (100%) = 13500

             Ending Work In Progress (60%) = 8100

In terms of Conversion Costs the Equivalent units were calculated as

             Units Completed and Transfered (100%) = 13500

             Ending Work In Progress (60%) = 8100

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