Details of the manufacturing activity in Amy Corporation's Assembly Department for the month of December is given below: All materials are added at the beginning of processing in the Assembly Department.The equivalent units for labor and overhead for the month, using the weighted-average method, is:

Question

Details of the manufacturing activity in Amy Corporation's Assembly Department for the month of December is given below:  All materials are added at the beginning of processing in the Assembly Department.The equivalent units for labor and overhead for the month, using the weighted-average method, is:

Quizplus · Accepted Answer

The equivalent units for labor and overhead are calculated separately and then added together to get the total equivalent units.

For labor: 
Equivalent units for labor = Units completed and transferred out + (Units in ending WIP inventory x % complete) 
= 160,000 + (28,000 x 60%) 
= 160,000 + 16,800 
= 176,800

For overhead: 
Equivalent units for overhead = Equivalent units for materials x Overhead application rate 
= 160,000 x $2.50 
= $400,000

Total equivalent units = Equivalent units for labor + Equivalent units for overhead 
= 176,800 + $400,000 
= 81,000

Therefore, the best choice is C.

Details of the Manufacturing Activity in Amy Corporation's Assembly Department