Jawson Corporation uses the weighted-average method in its process costing system. Operating data for the Painting Department for the month of April appear below: Units Percent Complete with Respect to Conversion Beginning work in process inventory 6,300 10% Transferred in from the prior department during April 65,600 Ending work in process inventory 4,600 70% What were the equivalent units for conversion costs in the Painting Department for April? a. 67,300 b. 70,520 c. 68,820 d. 63,900

Answer: B. 70520

Explanation:

Given the following;

Beginning work in process = 6,300, 10%

Ending work in process = 4,600, 70%

Transferred from previous department = 65,600

Applying the weighted average method,

Unit transferred = beginning work in process + transferred from business department - ending work in process

Unit transferred = 6300 + 65600 - 4600

Unit transferred = 71900 - 4600 = 67300

Equivalent unit for conversion = ending process inventory * 0.7 + units transferred = (4600 * 0.7) + 67300

3220 + 67300 = 70520

The equivalent units for conversion costs in the Painting Department for April is b. 70,520

Explanation:

Equivalent Units for Conversion cost means the Total Units in terms of degree of Conversion Costs applied to those units.

To calculate the equivalent units for conversion costs in the Painting Department for April we:

First Determine the Units Completed and Transferred Out of the Painting Department

Hint: Units Inputs must equal Units out puts

Units Completed and Transferred Out = Units of Opening Work In Process + Units Transferred In from Prior Department - Ending Work In Process

= 65,600+6,300-4,600

= 67,300

Second Calculate the total Units of Conversion Costs

Completed and Transferred Out - 100% 67,300

Add Closing Work In Process - 70% 3,220

Total Units for Conversion Costs 70,520