The management for Zero Corp. has asked their cost accountant Alec to compile some data about their process costing. Zero Corp. is a regional factory that manufactures peach-scented soy candles that are sold in glass mason jars. During their most recent year, Zero started 49,600 candles and completed a total of 37,450 by the end of the year. They began the year with 3,480 candles in their Work-in-Progress (WIP) Inventory with 28% being incomplete, and their ending WIP Inventory units are 19% incomplete overall. Zero adds both Conversion Costs (CC) and Direct Material (DM) resources evenly throughout the process. Alec has decided to use the Weighted-Average method for their process costing and has determined their equivalent units to be (Round your final answer to the nearest whole unit.)

Question

Quizplus · Accepted Answer

This question requires the determination of equivalent units using the Weighted-Average method, so you will need to omit beginning inventory from the calculation. It should be noted that the question presents units for beginning and ending units in terms of what is incomplete versus what has been completed, so this will need to be factored in as well. First, determine how many units to account for, so that includes adding the beginning inventory of 3,480 to the units started during the period of 49,600 for a total of 53,080. Next, subtract the number of units completed and removed, 37,450, to arrive at an ending inventory of 15,630 units. The equivalent units using the Weighted-Average method will be equal to the units completed times their percentage of completion (37,450 × 100%) plus the units in ending inventory times their percentage of completion (15,630 × 81%), 37,450 + 12,660.30 = 50,110 units.

The Management for Zero Corp