Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units:Beginning Inventory: 33,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 130,000. Units completed and transferred out: 163,000. Ending Inventory: 35,000 units, 100% complete as to materials and 30% complete as to conversion. Costs:Costs in beginning Work in Process - Direct Materials: $53,000. Costs in beginning Work in Process - Conversion: $58,850. Costs incurred in February - Direct Materials: $297,000. Costs incurred in February - Conversion: $609,150. Calculate the equivalent units of materials.

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Business

Yair Travis

18 May, 10:30

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units:Beginning Inventory: 33,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 130,000. Units completed and transferred out: 163,000. Ending Inventory: 35,000 units, 100% complete as to materials and 30% complete as to conversion. Costs:Costs in beginning Work in Process - Direct Materials: $53,000. Costs in beginning Work in Process - Conversion: $58,850. Costs incurred in February - Direct Materials: $297,000. Costs incurred in February - Conversion: $609,150. Calculate the equivalent units of materials.

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Roland Lowery · Answer 1

Equivalent units of materials 165,000

Explanation:

The formula for equivalent untis will be as follow:

Started and completed +

ending inventory x percentage of completion +

incomplete portion of beginning inventory

In this case the beginning inventory WIP is at 100% therefore no materials are added.

Now, we procede with the other concepts:

Started and completed 130,000 units thus 100% materials

Ending Inventory 35,000 units at 100%

We simply add both figures as they are at 100%

130,000 + 35,000 = 165,000 equivalent units of materials for the month