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 conversion costs for the month were:
A) 14,100
B) 14,000
C) 16,000
D) 15,600

Question

Quizplus · Accepted Answer

Using the weighted average method, the equivalent units for conversion costs can be calculated as follows:

Units in beginning inventory: 2,000 x 25% = 500
Units started in the month: 14,000 
Total units to account for: 14,500 
Less: units in ending inventory (1,000 x 60%) = 600 
Equivalent units for conversion costs: (500 + 14,000 + 600) = 15,100
Therefore, the best choice is D, 15,600.

Salmon Manufacturing Company Uses a Process Costing System