Narver Company uses the weighted-average method in its process costing system.Operating data for the Lubricating Department for the month of October appear below: What were the equivalent units of production for conversion costs in the Lubricating Department for October?
A) 37,100.
B) 43,100.
C) 44,780.
D) 47,780.

Question

Narver Company uses the weighted-average method in its process costing system.Operating data for the Lubricating Department for the month of October appear below:  What were the equivalent units of production for conversion costs in the Lubricating Department for October?
A) 37,100. 
B) 43,100. 
C) 44,780. 
D) 47,780.

Quizplus · Accepted Answer

To calculate the equivalent units of production for conversion costs, we need to add the equivalent units of production for beginning work in process inventory to the equivalent units of production for units started and completed during the period, and subtract the equivalent units of production for ending work in process inventory.

Equivalent Units of Production for Conversion Costs = Equivalent Units of Production for Beginning WIP + Equivalent Units of Production for Units Started and Completed - Equivalent Units of Production for Ending WIP

Equivalent Units of Production for Beginning WIP = 28,000 x 70% = 19,600
Equivalent Units of Production for Units Started and Completed = 40,000 units
Equivalent Units of Production for Ending WIP = 17,680 x 70% = 12,376

Equivalent Units of Production for Conversion Costs = 19,600 + 40,000 - 12,376 = 44,780. Therefore, the best choice is C.

Narver Company Uses the Weighted-Average Method in Its Process Costing