Q3 The Assembly Department uses a weighted-average process cost accounting syste

ID: 2341383 • Letter: Q

Question

The Assembly Department uses a weighted-average process cost accounting system. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $135,500 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs.

Other data for the month of July are as follows:

How many equivalent units of production for conversion costs for July?

Beginning work in process inventory, 7/1 25,000 units (40% complete) Units completed and transferred out 90,000 units Ending work in process inventory, 7/31 30,000 units (30% complete)

Explanation / Answer

Equivalent units of production:

Equivalent Units

Physical Units

Materials

Conversion Costs

Transferred out

90,000 Units

Ending Work in process, July 31

30,000 Units

9,000 Units (30,000 × 30%)

Total

120,000 Units

99,000 Units

Therefore Equivalent units for production for conversion costs for July = 99000 units