Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process costing system. The following information pertains to the final department of Giddings's blockbuster drug called Solcax.$\begin{array}{lr}
\text { Beginning work-in-process }(40 \% \text { completed) } & 800 \text { units } \
\text { Transferred-in } & 4,000 \text { units } \
\text { Normal spoilage } & 400 \text { units } \
\text { Abnormal spoilage } & 200 \text { units } \
\text { Good units transferred out } & 3,600 \text { units } \
\text { Ending work-in-process }(1 / 3 \text { completed) } & 600 \text { units }\\text { Conversion costs in beginning inventory } & \$ 2,560 \
\text { Current conversion costs } & \$ 6,900
\end{array}$Giddings calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of Solcax that are spoiled are the result of defects not discovered before inspection of finished units. Materials are added at the beginning of the process. Using the weighted-average method, answer the following question:
What are the equivalent units for conversion costs?

Question

Quizplus · Accepted Answer

To calculate the equivalent units for conversion costs using the weighted-average method, we consider the work done on all units (beginning inventory, units started and completed, and ending inventory) without distinguishing when the work was done. The calculation is as follows:- Beginning work-in-process: 800 units at 40% = 320 equivalent units- Good units transferred out: 3,600 units at 100% = 3,600 equivalent units (since they are fully completed)- Ending work-in-process: 600 units at 33.33% (1/3 completed) = 200 equivalent units- Normal and abnormal spoilage are not considered in the calculation of equivalent units for conversion costs under the weighted-average method since the focus is on the work done.Adding these together: 320 + 3,600 + 200 = 4,120 equivalent units. However, since the options provided do not include 4,120, and considering the context of the question and typical rounding practices in accounting, the closest option provided is 4,400 units. This suggests there may have been a misunderstanding in the calculation or the presentation of options. Given the calculations presented, none of the options exactly match, but based on standard practices, the calculation should result in 4,120 equivalent units for conversion costs, which suggests a need for clarification in the question or options provided.

Giddings Pharmaceutical Company Is a Maker of Drugs for High