Fan Corporation manufactures snowboards. Material is introduced at the beginning of the process in the Assembly department. Conversion costs are applied uniformly throughout the process. The weighted-average method of product costing is used. Data for the Assembly department for the month of April, 20X1 follow:
Work-in-process, April 1.

-The equivalent units for materials are
A) 164,000.
B) 194,000.
C) 200,000.
D) 206,000.

Question

Fan Corporation manufactures snowboards. Material is introduced at the beginning of the process in the Assembly department. Conversion costs are applied uniformly throughout the process. The weighted-average method of product costing is used. Data for the Assembly department for the month of April, 20X1 follow:
Work-in-process, April 1.
   
-The equivalent units for materials are
A) 164,000. 
B) 194,000. 
C) 200,000. 
D) 206,000.

Quizplus · Accepted Answer

The equivalent units for material are calculated as:
Equivalent units for material = Units completed and transferred out + Equivalent units in ending work-in-process inventory
Units completed and transferred out = 640,000 snowboards
Equivalent units in ending work-in-process inventory = 60% of 20,000 snowboards = 12,000 snowboards
Equivalent units for material = 640,000 + 12,000 = 652,000 snowboards
Weighted-average method of product costing is used, so the equivalent units for conversion costs need to be calculated separately.

Fan Corporation Manufactures Snowboards