A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead). The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead). All direct materials are added at the beginning of the process. Under the Weighted Average inventory valuation method, what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively?

Question

Quizplus · Accepted Answer

To calculate the equivalent units of production, we need to add the units completed to the equivalent units of the ending inventory.

Direct Materials:
Beginning inventory: 50,000 units
Started and completed: 120,000 units
Ending inventory: 40,000 units (1/4 complete = 10,000 equivalent units)
Equivalent units of production for direct materials: 50,000 + 120,000 + 10,000 = 180,000

Direct Labor and Overhead:
Since all units are 1/4 complete with respect to direct labor and overhead, the equivalent units of production for direct labor and overhead will be the same as for direct materials: 180,000.

Therefore, the answer is B) 210,000 for direct materials and 180,000 for direct labor and overhead.

A Company Uses a Process Cost Accounting System