Question

Required information Skip to question [The following information applies to the questions displayed below.] Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the first process. During November, the first process transferred 780,000 units of product to the second process. Additional information for the first process follows. At the end of November, work in process inventory consists of 185,000 units that are 50% complete with respect to conversion. Beginning work in process inventory had $188,175 of direct materials and $196,313 of conversion cost. The direct material cost added in November is $1,259,325, and the conversion cost added is $3,729,937. Beginning work in process consisted of 76,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 76,000 were from beginning work in process and 704,000 units were started and completed during the period. Required: For the first process: 1. Determine the equivalent units of production with respect to direct materials and conversion.

Answer 1

• Direct materials = 965,000 units
• Conversion = 872,500 units

Explanation:

a. Direct materials

Direct materials are added at the beginning of the process so ending EUP is 100% in respect to EUP.

EUP Direct materials = Finished goods + Closing EUP

= 780,000 + 185,000

= 965,000 units

b. Conversion

= Finished goods + Closing EUP

= 780,000 + (0.50 * 185,000)

= 780,000 + 92,500

= 872,500 units