Habitat Company uses the weighted average costing method in its costing system. In the assembly department, the equivalent units for conversion costs amounted to 35,000 for the month of May. In beginning Work-in-Process Inventory, 5,000 units were 50% complete. During the month, 33,000 units were started and 31,400 were completed and transferred. How many units were in the ending Work-in-Process Inventory?
A) 3,600 units
B) 5,000 units
C) 6,600 units
D) 7,000 units

Question

Quizplus · Accepted Answer

To calculate the equivalent units, we need to take into account both the units started and the units already in beginning WIP inventory. 
For conversion costs, we have:
Equivalent units = Units started + (Units in beginning WIP inventory * Percentage complete)
Equivalent units = 33,000 + (5,000 * 0.5) 
Equivalent units = 35,500

We know that 31,400 units were completed and transferred out, so the remaining units must be in ending WIP inventory:
Ending WIP inventory = Equivalent units - Completed units 
Ending WIP inventory = 35,500 - 31,400 
Ending WIP inventory = 4,100 units

Therefore, the answer is C) 6,600 units.

Habitat Company Uses the Weighted Average Costing Method in Its