Question

. The following data are available for a company's manufacturing activities:Beginning goods in process inventory 5,000 units, 1/4 of the labor added this periodUnits started and completed 15,000Ending goods in process inventory 6,000 units, 1/2 of the labor added this periodAssume the company uses the weighted-average inventory method. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?A. 21,000; 23,000B. 26,000; 19,250C. 21,000; 19,250D. 26,000; 23,000E. 19,250;19,250

Answer 1

Answer:

D. 26,000; 23,000

Explanation:

Equivalent Units (Weighted Average Method) =  Beginning Goods In process + Units Completed + Ending Goods x % of completion

Direct Materials:  5,000 + 15,000 + 6,000 x 100% = 26,000

Direct Labor: 5,000 + 15,000 + 6,000 x 50% = 23,000

Remember: In the weighted average cost system the opening inventory units count as a full equivalent unit of production.