Williams 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 William's blockbuster drug called "HBP".
Williams 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 "HBP" 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,what are the equivalent units for conversion costs?

Question

Williams 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 William's blockbuster drug called "HBP". 
Williams 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 "HBP" 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,what are the equivalent units for conversion costs?

Quizplus · Accepted Answer

The equivalent units for conversion costs are calculated by adding the equivalent units from beginning work in process (2,700), equivalent units from current period production (300), equivalent units from normal spoilage (200), and equivalent units from abnormal spoilage (600/3 = 200). Therefore, the total equivalent units for conversion costs are 3,400 units, which is option D.

Williams Pharmaceutical Company Is a Maker of Drugs for High