Question

A production department's output for the most recent month consisted of 14,000 units completed and transferred to the next stage of production and 14,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 70% complete with respect to both direct materials and conversion costs. There were 1,800 units in beginning Work in Process inventory, and they were 90% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

Answer 1

To calculate the equivalent units of production for the month using the weighted average method, add the full equivalent units of the completed output to the equivalent units of the beginning Work in Process inventory and ending Work in Process inventory, adjusted for their respective stages of completion. The total comes to 25,420 equivalent units.

Step-by-step explanation:

The calculation of equivalent units of production using the weighted average method takes into account the output transferred to the next stage of production, as well as the percentage completion of the units in the ending Work in Process (WIP) inventory. In this case, there are 14,000 units completed and 14,000 units at 70% completeness in ending inventory. The beginning WIP inventory had 1,800 units at 90% completeness. First, we calculate the equivalent units for the completed units, which are fully 100% complete. Then we add the equivalent units for the beginning inventory and ending inventory, taking into account their respective completion percentages.

To calculate:

1. Completed units: 14,000 (100%) = 14,000 equivalent units
2. Beginning WIP Inventory: 1,800 units at 90% = 1,620 equivalent units
3. Ending WIP Inventory: 14,000 units at 70% = 9,800 equivalent units

The total equivalent units of production for the month are:

14,000 (completed units) + 1,620 (beginning WIP) + 9,800 (ending WIP) = 25,420 equivalent units

Answer 2

Materials = 19,600 units

Conversion Costs = 19,600 units

Step-by-step explanation:

It is important to note that the company uses the weighted average method.

This means we are only interested in the equivalent units of units completed and transferred and units in ending work in process

The equivalent units of production for the month, assuming the company uses the weighted average method :

Materials = 14,000 x 100 % + 14,000 x 70% = 19,600 units

Conversion Costs = 14,000 x 100 % + 14,000 x 70% = 19,600 units