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.
A) 58,400 materials; 56,800 conversion.
B) 65,400 materials; 66,800 conversion.
C) 68,400 materials; 66,800 conversion.
D) 65,400 materials; 65,800 conversion.
E) 59,000 materials; 61,000 conversion.

Question

Quizplus · Accepted Answer

To calculate the equivalent units for materials and conversion, we need to multiply the number of units by the percentage of completion, and then add the work-in-progress (ending inventory) multiplied by its percentage of completion.

For materials:

Equivalent units for materials = (Number of units started + Number of units in ending inventory) x Percentage of completion

Equivalent units for materials = (60,000 + 8,000) x 80% = 68,400 units

For conversion:

Equivalent units for conversion = (Number of units started + Number of units in ending inventory) x Percentage of completion

Equivalent units for conversion = (60,000 + 8,000) x 60% = 66,800 units

Therefore, the correct answer is C) 68,400 materials; 66,800 conversion.

At the Beginning of the Month, the Forming Department of Martin