A production department's output for the most recent month consisted of 9,400 units completed and transferred to the next stage of production and 6,400 units in ending Work in Process inventory. The units in ending Work in Process inventory were 60% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

A. 8,200 units.

B. 12,040 units.

C. 15,800 units.

D. 5,560 units.

E. 13,240 units.

Answer: Option (E) is correct.

Explanation:

Given that,

Output completed and transferred = 9,400 units

Ending Work in Process inventory = 6,400 units

The units in ending Work in Process inventory were 60% complete with respect to both direct materials and conversion costs.

Company uses a weighted average method : -

Units completed and transferred:

Equivalent units = 100% of 9,400 units

= 9,400 units

Ending goods in process:

Equivalent units = 60% of 6,400

= 3,840 units

Total equivalent units = 9,400 units + 3,840 units

= 13,240 units

The correct option is e. 13,240 units

Explanation:

By applying the weightage average method, the equivalent units of production is computed below:

1. Total number of units completed = 9,400 units * 100% = 9,400 units

2. Ending Work in process inventory = 6,400 units * 60% =

3,840 units

So, the equivalent units of production for the month would be the sum of step 1 and the step 2 which equals to

= 9,400 units + 3,840 units

= 13,240 units

Thus, the equivalent units of production for the month is 13,240 units

Hence, the correct option is e. 13,240 units