The Werner Corporation uses the weighted-average method in its process costing system. The company recorded 24,400 equivalent units for conversion costs for November in a particular department. There were 4,000 units in the ending work in process inventory on November 30 which were 60% complete with respect to conversion costs. The November 1 work in process inventory consisted of 5,000 units which were 40% complete with respect to conversion costs. A total of 22,000 units were completed and transferred out of the department during the month. The number of units started during November in the department was:
A) 22,000 units
B) 17,000 units
C) 26,000 units
D) 21,000 units

Question

Quizplus · Accepted Answer

Using the weighted-average method, we need to calculate the equivalent units of production for the month:

Equivalent units of production (conversion costs) = Units completed and transferred out + Equivalent units in ending work in process inventory

Equivalent units of production (conversion costs) = 22,000 + (4,000 units × 60%)

Equivalent units of production (conversion costs) = 22,000 + 2,400

Equivalent units of production (conversion costs) = 24,400

We can use this equation to solve for the units started during November:

Equivalent units of production (conversion costs) = Units started during November × Percentage complete at the beginning of November + (Units started during November × Percentage complete during November)

24,400 = Units started during November × 40% + Units started during November × 100%

24,400 = Units started during November × 140%

Units started during November = 24,400 ÷ 1.4

Units started during November = 17,428.57 ≈ 21,000 units (rounded to the nearest whole unit)

Therefore, the best choice is D) 21,000 units.

The Werner Corporation Uses the Weighted-Average Method in Its Process