A production department\'s output for the most recent month consisted of 10,000

Question

A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning Work in Process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

Explanation / Answer

23 Units Completed and Transferred to Net Stage = 10000 Units Units in ending Goods in process inventory (10,000X 50%)= 5000 Units Equivalent 15000 24 A key idea in process costing that refers to the number of units that could have been started and completed given the costs incurred during the period is known as Equivalent units of Prodduction. 25 Equlivant Units Produced by the department : 900 units + 5000 units + (800 x 0.25) =6100 units

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