Jordan is a cost accountant at Barkley Inc, a factory that manufactures modern black candlesticks. Jordan is in the process of updating all of their records and has gathered the following process costing information for their Conversion Costs (CC):
Beginning Work-in-Progress (WIP) Inventory: 950 units, 23% completed
Units Started During the Period: 32,000
Units Completed by the End of the Period: 26,400
Ending WIP Inventory: 88% completed
Barkley adds both Conversion Costs and Direct Material (DM) resources evenly throughout the process. What are the equivalent units of production if Barkley employs the Weighted-Average method?

Question

Quizplus · Accepted Answer

This question requires the calculation of equivalent units of production using the Weighted-Average method. Using the Weighted-Average method, omit the beginning inventory from the calculation. First, determine how many units to account for which includes adding the beginning WIP inventory of 950 to the units started during the period of 32,000 for a total of 32,950. Next, subtract the number of units completed and removed, 26,400, to arrive at an ending inventory of 6,550 units. The equivalent units under the Weighted-Average method will be equal to units completed times their percentage of completion (26,400 × 100%) plus the units in ending WIP inventory times their percentage of completion (6,550 × 88%), 26,400 + 5,764 = 32,164 units.

Jordan Is a Cost Accountant at Barkley Inc, a Factory