Assembly department of Zahra Technologies had 200 units as work in process at the beginning of the month. These units were 45% c
omplete. It has 300 units which are 25% complete at the end of the month. During the month, it completed and transferred 600 units. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Zahra uses weighted-average process-costing method. What is the number of equivalent units of work done during the month with regards to direct materials?
Since all the direct materials are added at the beginning, we assume that the 200 beginning inventory was completed 100% in regards to direct materials and as such 600 - 200 = 400 units transferred were completed in respect to direct materials and 300 units in work in progress are also completed as 100% of direct materials.
So total equivalent units in respect to direct materials are 400 + 300 = 700 units of work done.
The total time period for which interest will be accrued and will be credited to the interest income account would be for the period November 1,2018 - December 31,2018 i.e 2 months.
