Question

A department had 21,500 units that were 20% complete in beginning Goods in Process Inventory. During the current period 103,200 units were transferred in. Ending Goods in Process Inventory was 25,800 units that were 70% complete. Assume this company uses the weighted-average method of process costing and direct material is added uniformly throughout the process. What are the equivalent units produced with respect to direct material?

Answer 1

The equivalent units produced for direct materials, using the weighted-average method of process costing, is 121,260. This includes 103,200 units completed and transferred out, and the 70% completion of 25,800 units in ending inventory, giving us an additional 18,060 equivalent units.

Step-by-step explanation:

The question requires calculating the equivalent units for direct materials using the weighted-average method in a process costing situation. To find the equivalent units produced for direct materials, we consider units fully completed and transferred out, as well as the percentage completion of ending goods in process.

Here's the calculation:

• Units transferred out: 103,200 (fully completed, so 100% equivalent)
• Units in ending inventory: 25,800 at 70% completion for direct materials
• Equivalent units for ending inventory: 25,800 units × 70% = 18,060
• Total equivalent units for direct materials: 103,200 + 18,060 = 121,260

Therefore, the total number of equivalent units of direct material for this period is 121,260.