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 1,300 units that were 40% completed. 13,000 units were started into the process during January. On January 31, the inventory consisted of 650 units that were 70% completed. What would be the equivalent units for conversion cost using the weighted average method?

Question

Business

Reuben Grant

20 March, 13:53

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 1,300 units that were 40% completed. 13,000 units were started into the process during January. On January 31, the inventory consisted of 650 units that were 70% completed. What would be the equivalent units for conversion cost using the weighted average method?

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Answers (1)

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Oswaldo Tapia · Answer 1

The equivalent units for conversion cost using the weighted average method is $14,105 units

Explanation:

For computing the equivalent units, we have to compute the completed and transferred units which is shown below:

= Beginning inventory + units started - completed units

= 1,300 units + 13,000 units - 650 units

= 13,650 units

Now we can compute the equivalent units by considering

(Completed and transferred units * completed percentage) + (ending work in progress units * completed percentage)

= (13,650 units * 100%) + (650 units * 70%)

= 13,650 units + $455 units

= $14,105 units