Salmon Manufacturing Company 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 direct material for the month were:
A) 13,600
B) 14,000
C) 16,000
D) 15,600

Question

Quizplus · Accepted Answer

Since direct materials are added at the beginning of the process, the equivalent units for direct materials would be the total units started during the month plus the beginning inventory, which is 14,000 + 2,000 = 16,000 units.

Salmon Manufacturing Company Uses a Process Costing System