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24 March, 10:00

Haberdashery Company has a beginning Work-in-Process Inventory of 37,000 units (40% complete). During the period, 122,000 units were started and the ending Work-in-Process Inventory consisted of 32,000 units (80% complete). What are the equivalent units for conversion costs using weighted-average process costing

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  1. 24 March, 10:06
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    152,600 units

    Explanation:

    Weighted average costing adds the value of beginning inventory in the period cost to calculate the average cost per unit.

    According to this method the equivalent units formula is as follow

    Equivalent Units = Unit completed and transferred to Finished goods + Units in Work in Process x Completion percentage

    Units Completed in the period = 37,000 + 122,000 - 32,000 = 127,000

    Equivalent Units = 127,000 + (32,000 x 80%) = 152,600 units
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