Use the following information for the next 3 questions.
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

The equivalent units for conversion costs are calculated by adding the units completed and transferred out to the equivalent units in ending inventory. Units completed and transferred out = 2,000 (beginning inventory) + 14,000 (started) - 1,000 (ending inventory) = 15,000. Equivalent units in ending inventory = 1,000 units * 60% = 600. Total equivalent units for conversion costs = 15,000 + 600 = 15,600.

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