Carmine Inc. creates all of its parts in the cutting department before they are passed on to the finishing department. Carmine adds packaging material at the beginning of the finishing process. The finishing department had a beginning Work-in-Progress (WIP) Inventory of 450 units in April that were 74% complete with respect to Conversion Costs (CC). During April, the finishing department had 3,678 units Transferred-In (TI) from the cutting department and had completed 3,002 units by the end of the month. This left 1,126 units in ending inventory that are 45% complete with respect to CC. What are the equivalent units of production for April for TI, Direct Materials (DM), and CC under the Weighted-Average method? (Round units to nearest whole number.)

Question

Quizplus · Accepted Answer

This question requires you to calculate equivalent units for three different cost categories using the Weighted-Average method. With the Weighted-Average method, the focus is on all units and costs completed this period, so beginning inventory will not have to be evaluated separately. For Transferred-In and Direct Materials, this will be equal to (Units Completed this Period × Percentage of Costs Added) + (Units in Ending WIP Inventory × Percentage of Costs Added) = (3,002 units × 100%) + (1,126 units × 100%) = 3,002 units + 1,126 units = 4,128 units. For Conversion Costs, this will be equal to (Units Completed this Period × Percentage of Costs Added) + (Units in Ending WIP Inventory × Percentage of Costs Added) = (3,002 units × 100%) + (1,126 units × 45%) = 3,002 units + 507 units = 3,509 units.