ABC Company has a beginning Work-in-Process Inventory of 25,000 units (40% complete). During the period, 110,000 units were started and the ending Work-in-Process Inventory consisted of 20,000 units (80%). What are the equivalent units for conversion costs using weighted-average process costing? A. 110,000B. 115,000C. 121,000D. 131,000

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Business

Downs

23 June, 02:55

ABC Company has a beginning Work-in-Process Inventory of 25,000 units (40% complete). During the period, 110,000 units were started and the ending Work-in-Process Inventory consisted of 20,000 units (80%). What are the equivalent units for conversion costs using weighted-average process costing? A. 110,000B. 115,000C. 121,000D. 131,000

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London Monroe · Answer 1

The correct answer is D. 131,000

Explanation:

To get equivalent units we use the following formula.

Total equivalent units of a cost product = A + B * C

Where:

A = units transferred or finished goods (completed)

B = units Ending Work in Process

C = percentage of completion

Units transferred are the beginning Inventory + started units - ending Inventory = 25,000+110,000-20,000 = 115,000

Total equivalent units of a cost product = 115,000 + 20,000 * 0,80

Total equivalent units of a cost product = 131,000