A department had 12,500 units which were 20% complete in beginning Goods in Process Inventory. During the current period 60,000 units were transferred in. Ending Goods in Process Inventory was 15,000 units which were 70% complete. Assume this company uses the Weighted Average method of process costing and direct material is added uniformly throughout the process. What are the equivalent units produced with respect to direct material?

Question

Quizplus · Accepted Answer

The equivalent units for direct materials under the Weighted Average method are calculated by adding the units completed and transferred out to the equivalent units in ending inventory. Here, 60,000 units were transferred in, and the ending inventory is 15,000 units at 70% completion. Therefore, the equivalent units for direct materials are 60,000 + (15,000 * 70%) = 60,000 + 10,500 = 70,500. However, since the question asks for equivalent units produced, we consider only the units transferred in and the completion of ending inventory, which gives us 68,000 equivalent units.

A Department Had 12,500 Units Which Were 20% Complete in Beginning