LuLu, Inc. manufactures a product that passes through two processes: mixing and moulding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for May follows:
During May, 25,000 units were completed and transferred to the moulding department. The following costs were incurred by the mixing department during May:
Work in process, May 1:
$\begin{array}{lr}
\text { Units (35\% complete) } & 5,000 \
\text { Direct materials } & \$ 24,000 \
\text { Direct labour } & \$ 30,000 \
\text { Overhead } & \$ 10,000
\end{array}$ By May 31, 2,500 units that were 80% complete remained in the mixing department. LuLu uses the weighted average method. $\begin{array}{lr}
\text { Direct materials } & \$ 90,000 \
\text { Direct labour } & 120,000 \
\text { Overhead } & 30,000
\end{array}$
-Refer to the Figure.What would be LuLu's equivalent units of production when using the weighted average method?
A)20,000
B)23,000
C)27,000
D)28,750

Question

LuLu, Inc. manufactures a product that passes through two processes: mixing and moulding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for May follows:
During May, 25,000 units were completed and transferred to the moulding department. The following costs were incurred by the mixing department during May:
 Work in process, May 1:
$\begin{array}{lr}
\text { Units (35\% complete) } & 5,000 \
\text { Direct materials } & \$ 24,000 \
\text { Direct labour } & \$ 30,000 \
\text { Overhead } & \$ 10,000
\end{array}$ By May 31, 2,500 units that were 80% complete remained in the mixing department. LuLu uses the weighted average method. $\begin{array}{lr}
\text { Direct materials } & \$ 90,000 \
\text { Direct labour } & 120,000 \
\text { Overhead } & 30,000
\end{array}$
-Refer to the Figure.What would be LuLu's equivalent units of production when using the weighted average method?
A)20,000
B)23,000
C)27,000
D)28,750

Quizplus · Accepted Answer

The equivalent units of production using the weighted average method are calculated by adding the units completed and transferred out to the equivalent units in ending work in process. Here, 25,000 units were completed and transferred out, and the ending work in process is 2,500 units at 80% completion, which equals 2,000 equivalent units. Therefore, the total equivalent units of production are 25,000 + 2,000 = 27,000.

LuLu, Inc Manufactures a Product That Passes Through Two Processes: Mixing