Question

Fabert Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 16,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. An additional 60,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 65,000 units were completed in the Assembly Department and transferred to the next processing department. There were 11,000 units in the ending work in process inventory of the Assembly Department that were 50% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

A) 65,000
B) 70,500
C) 64,100
D) 55,000

Answer 1

The equivalent units for conversion costs in the Assembly Department for the month are calculated by adding the equivalent units for completed units and the equivalent units for the ending work in process, which totals to 70,500 equivalent units. So, the correct answer is option b.

Step-by-step explanation:

When calculating the equivalent units for conversion costs using the weighted-average method in a process costing system, we must consider the units completed and transferred out, plus the units in ending work in process inventory and their degree of completion for conversion costs.

• Units completed and transferred out: 65,000 units (100% complete)
• Ending Work in Process units: 11,000 units (50% complete)

We calculate the equivalent units as follows:

1. Calculate the equivalent units for the completed units: 65,000 units x 100% = 65,000 equivalent units
2. Calculate the equivalent units for the ending work in process: 11,000 units x 50% = 5,500 equivalent units
3. Add the equivalent units from step 1 and step 2: 65,000 + 5,500 = 70,500 equivalent units

Therefore, the correct answer is B) 70,500.