Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300.
-
Calculate the equivalent units of conversion.
A) 342,000
B) 294,000
C) 250,000
D) 333,000
E) 317,000

Question

Quizplus · Accepted Answer

To calculate equivalent units of conversion, we need to take into account the units that were in beginning inventory and the units that were started and completed during the month, as well as the units that are in ending inventory (and the percentage of completion of these units).

For beginning inventory: 
80,000 units x 20% complete = 16,000 equivalent units of conversion

For units started and completed: 
250,000 units x 100% complete = 250,000 equivalent units of conversion

For ending inventory: 
30,000 units x 10% complete = 3,000 equivalent units of conversion

Total equivalent units of conversion = 16,000 + 250,000 + 3,000 = 333,000

Therefore, the best choice is D (333,000).

Richards Corporation Uses the Weighted-Average Method of Process Costing