The Colorado Company manufactures a product that goes through three processing d

Question

The Colorado Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.
Percentage Completed
Units Materials Conversion
Work in process, June 1 80,000 65% 45%
Work in process, Jun 30 65,000 75% 65%
The department started 325,000 units into production during the month and transferred 340,000 completed units to the next department.
Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs.

Explanation / Answer

Hi,

Please find the answer as follows:

Material = 340000 (Units Completed and Transferred at 100%) + 65000*.75 (Ending Inventory) = 388750

Conversion = 340000 (Units Completed and Transferred at 100%) + 65000*.65 (Ending Inventory) = 382250

Note:

Opening Inventory details are not considered in the calculation of equivalent units of production under the weighted-average method of accounting.

Thanks.

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