Assume that 12,000 units, 60% complete were in the beginning work in process, 50,000 units were started during the period, 6,000 units, 30% complete were in the ending work in process. Direct materials are added at the beginning of the process and conversion costs are incurred evenly throughout the process.
- Assuming the company uses the weighted-average method, what are the equivalent units of production for direct materials?

Question

Quizplus · Accepted Answer

Under the weighted-average method, equivalent units for direct materials are calculated by adding the units completed and transferred out to the equivalent units in ending work in process. Since direct materials are added at the beginning, all units started and completed are fully accounted for. Therefore, the equivalent units for direct materials are 50,000 (units started) + 6,000 (ending WIP) = 56,000. However, since the beginning WIP is already 60% complete, the equivalent units for direct materials are 50,000 (completed) + 12,000 (beginning WIP) = 62,000.

Assume That 12,000 Units, 60% Complete Were in the Beginning