The flow of goods in a firm that uses process costing is, work in process at the start 8 000 units 50% complete, units started 32 000, units finished 26 000, work in process end of period 14 000 units 25% complete. Raw materials are issued at the end of the production process. Using the weighted average method, the equivalent units as to conversion cost for the period are:

Question

Quizplus · Accepted Answer

The equivalent units for conversion costs using the weighted average method are calculated by adding the completed units to the equivalent units in ending work in process, taking into account the percentage completion of those units. Here, the calculation is as follows: Completed units = 26,000. Ending work in process = 14,000 units at 25% completion, which equals 3,500 equivalent units (14,000 * 0.25). The beginning work in process is not directly relevant because the weighted average method blends the costs of the beginning inventory with the costs of the current period. Therefore, equivalent units for conversion costs = 26,000 (completed) + 3,500 (ending WIP) = 29,500 units.

The Flow of Goods in a Firm That Uses Process