A company uses a process costing system. Its Welding Department completed and transferred out 100,000 units during the current period. The ending inventory in the Welding Department consists of 30,000 units (75% complete with respect to direct materials and 40% complete with respect to conversion costs). Determine the equivalent units of production for the Welding Department for direct materials and conversion costs assuming the weighted average method.
A) 107,500 materials; 118,000 conversion.
B) 130,000 materials; 130,000 conversion.
C) 112,500 materials; 130,000 conversion.
D) 130,000 materials; 112,000 conversion.
E) 122,500 materials; 112,000 conversion.

Question

Quizplus · Accepted Answer

The equivalent units for direct materials are 100,000 (completed) + 30,000 * 75% (ending inventory) = 122,500. For conversion costs, it is 100,000 (completed) + 30,000 * 40% (ending inventory) = 112,000.

A Company Uses a Process Costing System