At the beginning of the month, the forming department of martin manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. during the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. at the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. if martin manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the forming department.

Question

Business

Paris Mcknight

16 February, 07:50

At the beginning of the month, the forming department of martin manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. during the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. at the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. if martin manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the forming department.

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Kenny Lam · Answer 1

Equivalent units for materials are 68,400 units

Equivalent units for conversion are 66,800 units

Explanation:

Eighted average costing adds the value of beginning invventory in the period cost to calculate the average cost per unit.

According to this method the equivalent units formula is as follow

Equivalent Units = Unit completed and transferred to Finished goods + Units in Work in Process x Completion percentage

Material

Equivalent Units = 62,000 + 8,000 x 80% = 68,400 units

Conversion

Equivalent Units = 62,000 + 8,000 x 60% = 66,800 units