Question

Equivalent units for a process costing system using the weighted average method would be equal to:

1) units completed during the period and transferred out
2) units started and completed during the period plus equivalent units in the ending WIP inventory
3) units completed during the period less equivalent units in the beg inventory, plus equivalent units in the end WIP inventory
4) units completed during the period plus equivalent units in the end WIP inventory

Answer 1

Equivalent units in a process costing system using the weighted average method are the sum of units started and completed during the period and the equivalent units for the ending work in progress inventory.

Step-by-step explanation:

The correct answer for the question about the calculation of equivalent units in a process costing system using the weighted average method is: 2) units started and completed during the period plus equivalent units in the ending WIP inventory.

Equivalent units are calculated by adding the units that were fully completed during the period and then adding the equivalent units represented by the work in progress at the end of the period. The starting inventory is not specifically considered in the weighted average method for the calculation of equivalent units since costs are blended together.

For example, if a business had 100 units that were partially completed in terms of material costs and were 50% complete, the equivalent units for materials would be 50 (100 units x 50%). This would be added to any other full units that were produced during the period.