Audrey Auto Accessories manufactures plastic moldings for car seats. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

What were the equivalent units of direct materials and conversion costs, respectively, at the end of February? Assume Audrey uses the weighted-average process costing method.

Question

Audrey Auto Accessories manufactures plastic moldings for car seats. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

What were the equivalent units of direct materials and conversion costs, respectively, at the end of February? Assume Audrey uses the weighted-average process costing method.

Quizplus · Accepted Answer

Equivalent units of direct materials under weighted average = units completed + equivalent units in ending inventory = 1000 + 300 = 1300 equivalent units
Conversion costs = 1000 + (300 × 25%) = 1075 equivalent units

Audrey Auto Accessories Manufactures Plastic Moldings for Car Seats