Figure 6-13 Wonder Paints Corporation's Mixing Department began August 2014 with 10,000 gallons of product (40 percent completed) in process. During August, Wonder Paints started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent completed).
Refer to Figure 6-13. If materials were added when the units were 80 percent complete, how many equivalent units of production for materials would there be for Wonder Paints using the weighted average costing method?

Question

Quizplus · Accepted Answer

Under the weighted average method, equivalent units for materials are calculated based on the units completed and transferred out plus the equivalent units in ending inventory. Since materials are added when units are 80% complete, only the ending inventory contributes to equivalent units for materials. Therefore, the equivalent units for materials are 95,000 (completed and transferred out) + 0 (beginning inventory, as materials are added later) + 0 (ending inventory, as materials are added after 80% completion).

Figure 6-13 Wonder Paints Corporation's Mixing Department Began August 2014