Gibbons Company uses a process costing system and the weighted average method.The company had 400 units of product in its work in process inventory at the beginning of the period.During the period 1,500 additional units of product were started.At the end of the period there were 750 units of product in the Work in Process account.The ending work in process inventory was estimated to be 30% complete.The beginning work in process inventory had a cost of $2,000.Product costs totaling $42,000 were added to work in process during the period.The number of equivalent units in ending work in process is:
A) 450.
B) 750.
C) 1,275.
D) 225.

Question

Quizplus · Accepted Answer

The number of equivalent units can be calculated using the weighted average method as follows:

Units accounted for:
Beginning WIP inventory: 400
Units started during the period: 1,500
Total units accounted for: 1,900

Costs accounted for:
Beginning WIP inventory costs: $2,000
Costs added during the period: $42,000
Total costs accounted for: $44,000

Cost per equivalent unit:
Total costs accounted for / Total units accounted for = $44,000 / 1,900 = $23.16

Equivalent units in ending WIP inventory:
750 units × 30% = 225 units

Therefore, the answer is D, 225.

Gibbons Company Uses a Process Costing System and the Weighted