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9 January, 23:33

Madison Corporation's production cycle starts in the Processing Department. The following information is available for April: Units Work-in-process, April 1 (25% complete) 40,000 Total units in process during April 280,000 Work-in-process, April 30 (60% complete) 25,000 Materials are added at the beginning of the process in the Processing Department. What are the equivalent units of production for the month of April, assuming Madison uses the weighted-average method

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  1. 10 January, 02:54
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    Equivalent units = 270,000

    Explanation:

    Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.

    Completed Units = total units in process during April - Closing WIP

    = 280,000 - 25,000 = 255,000

    Note that the description 'total units in process in during April', implies that the opening inventory is inclusive in the figure of 280,000.

    Equivalent units = degree of completion (%) * units

    Item Equivalent units

    Completed units 255,000 255,000 * 100% = 255,000

    Closing work in progress 25,000 25,000 * 60% = 15,000

    Total equivalent units 270,000

    Equivalent units = 270,000
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Home » Business » Madison Corporation's production cycle starts in the Processing Department. The following information is available for April: Units Work-in-process, April 1 (25% complete) 40,000 Total units in process during April 280,000 Work-in-process, April 30
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