Question

A production department's output for the most recent month consisted of 16,500 units completed and transferred to the next stage of production and 16,500 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 2,300 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.

Answer 1

Answer:

The equivalent units of production for the month, assuming the company uses the weighted average method is 26,400 units.

Explanation:

The equivalent units of production for the month when the company uses the weighted average method is the addition of the units completed and transferred to next stage and degree of completion of the units in ending Work in Process inventory.

This can therefore be calculated as follows:

Equivalent units of production for the month = Units completed and transferred to next stage + Units in ending Work in Process inventory

Since,

Units completed and transferred to next stage = 16,500 units

Units in ending Work in Process inventory = 16,500 * 60% complete = 9,900 units

Therefore, we have:

Equivalent units of production for the month = 16,500 + 9,900 = 26,400 units

Therefore, the equivalent units of production for the month, assuming the company uses the weighted average method is 26,400 units.