Salmon Manufacturing Ltd uses a process costing system. Direct materials are added at the beginning of the process. During January, Department Q had a beginning inventory of 2,000 units, 25% complete for conversion costs. During the month 14,000 units were started and there were 1,000 units in ending inventory, 60% complete for conversion costs. Using weighted average process costing, the equivalent units for conversion costs for the month were
A) 14,100
B) 14,000
C) 16,000
D) 15,600

Question

Quizplus · Accepted Answer

To determine the equivalent units for conversion costs using weighted average process costing, we need to calculate the equivalent units for the units started and the units in ending inventory.

Equivalent units for units started = Units started x % complete 
Equivalent units for units started = 14,000 x 100% 
Equivalent units for units started = 14,000

Equivalent units for ending inventory = Units in ending inventory x % complete 
Equivalent units for ending inventory = 1,000 x 60% 
Equivalent units for ending inventory = 600

Total equivalent units = Equivalent units for units started + Equivalent units for ending inventory 
Total equivalent units = 14,000 + 600 
Total equivalent units = 15,600

Therefore, the equivalent units for conversion costs for the month were 15,600. The best choice is D.

Salmon Manufacturing Ltd Uses a Process Costing System