Use the following data from a company using a process costing system to answer the question below. Beginning Work in Process Inventory on June 1 :
1,000 units - 100 percent complete as to direct materials
80 percent complete as to conversion costs

Units Started During June:
6,400units

Ending Work in Process Inventory on June 30:
1,200 units - 100 percent complete as to direct materials
40 percent complete as to conversion costs

The company uses average process costing method.
Equivalent units for direct materials during the month totaled

Question

Use the following data from a company using a process costing system to answer the question below. Beginning Work in Process Inventory on June 1 :
 1,000 units - 100 percent complete as to direct materials
 80 percent complete as to conversion costs

Units Started During June:
6,400units

Ending Work in Process Inventory on June 30: 
1,200 units - 100 percent complete as to direct materials 
40 percent complete as to conversion costs

The company uses average process costing method.
Equivalent units for direct materials during the month totaled

Quizplus · Accepted Answer

Under the average method, equivalent units for direct materials are calculated by adding units completed and transferred out to the equivalent units in ending inventory. Since all units are 100% complete for direct materials, the equivalent units are 6,200 (completed and transferred out) + 1,200 (ending inventory) = 7,400.

Use the Following Data from a Company Using a Process