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26 February, 21:14

A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead). The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead). All direct materials are added at the beginning of the process. Under the weighted-average inventory valuation method, what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively? A. 210,000; 120,000B. 210,000; 180,000C. 167,500; 167,500D. 160,000; 162,500E. 160,000; 167,500

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  1. 26 February, 21:37
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    B Direct Materials 210,000; Conversion Cost 180,000

    Explanation:

    beginning inventory 50,000

    start and finished 120,000

    Complete and trasnferred-out 170,000

    Convesion Cost:

    Coplete and transferred-out 170,000

    Ending Inventory 40,000 x 1/4 = 10,000

    CC equivalent units 180,000

    DIrect Materials

    Coplete and transferred-out 170,000

    Ending Inventory 40,000x100% = 40,000

    DM equivalent units 210,000

    Under W-A method we justdiscriminate on transferred-out and ending work in process.

    We don't do the difference between started and finished and beginning inventory.
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