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Brody Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,100 units that were 65% completed. 10,800 units were started into the process during January. On January 31, the inventory consisted of 600 units that were 50% completed. What would be the equivalent units for conversion cost using the weighted average method?

a) 11,200
b)11,600
c) 10,800
d) 11,900

1 Answer

5 votes

Final answer:

The equivalent units for conversion cost using the weighted average method for Brody Corp are calculated by adding the work needed to complete the beginning inventory, the units started and completed during the month, and the work done on the ending inventory. This calculation yields 10,985 equivalent units, which when rounded is approximately 11,000 equivalent units. However, this result is not reflected in the given options.

Step-by-step explanation:

When calculating the equivalent units for conversion cost using the weighted average method for Brody Corp., we must account for both the work done on the beginning inventory (1,100 units that were 65% complete) and the work done during the month. With 10,800 units started into the process, we first complete the beginning inventory units to 100% and then add the fully completed units plus those in the ending inventory that were 50% complete.

  • Completion of beginning inventory: 1,100 units x 35% (100% - 65%) = 385 equivalent units
  • Units started and completed: 10,800 units - (1,100 - 600) units = 10,300 units (since 600 units are left in the ending inventory and 500 from the beginning inventory were finished)
  • Ending inventory: 600 units x 50% = 300 equivalent units

Adding these up gives us the equivalent units for conversion costs: 385 equivalent units + 10,300 units + 300 equivalent units = 10,985 equivalent units.

However, since the possible answers are in round hundreds, we can round this figure to the nearest hundred, giving us 11,000 equivalent units, which is not listed in the provided options. Therefore, there might be an error in the question, or one of the assumptions we made (like rounding) might not align with the way the question was intended to be answered.

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