Question

A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

Answer 1

Answer:

88,000 equivalent units for the period

Explanation:

one way : work on beginning + started - incomplete ending

20,000 x (1 - 0.2) = 16,000 units work on BI WIP during the period

                             90,000 units started

30,000 x (1- 0.4)  = (18,000) unfinished equivalent units

                            88,000 equivalent units for the period.

Other way: work on beginning + start and trasnferred + work on ending

20,000 x (1 - 0.2) = 16,000 units work on BI WIP during the period

                               60,000 started and transferred-out

        30,000 x .4 = 12,000 work on ending WIP

                               88,000 equivalent units for the period.

Other way: transferred out + work on ending - previous work on beginning

                     80,000 transferred out

30,000 x .4 = 12,000 work on ending WIP

20,000 x .2 = (4,000) previous work on beginning

                     88,000 equivalent units for the period.