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Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:

Units: Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $43,000.
Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000.
Costs incurred in February - Conversion: $599,150.

Required:
Calculate the equivalent units of conversion.

a. 110,000
b. 140,000
c. 144,000
d. 130,250
e. 165,000

Sagot :

Solution :

UNITS TO ACCOUNT FOR :

[tex]\text{Beginning Work}[/tex] in Process units            $ [tex]25,000[/tex]

[tex]\text{Add: Units Started}[/tex] in Process                  $ [tex]14,000[/tex]

Total Units to account for                         $ [tex]165,000[/tex]

UNITS TO BE ACCOUNTED FOR:

[tex]\text{Units completed}[/tex] and transferred out       $ [tex]135,000[/tex]

[tex]\text{Ending Work}[/tex] in Process                             $ [tex]30,000[/tex]

[tex]\text{Total Units}[/tex] to be accounted for                 $ [tex]165,000[/tex]

[tex]\text{Equivalent units}[/tex]

                                       Material cost                        Conversion

                               % of completion  Units        % of completion      Units

   

[tex]\text{Units started}[/tex]                  [tex]100\%[/tex]        $[tex]135,000[/tex]              [tex]100\%[/tex]        $[tex]135,000[/tex]        

and completed.

[tex]\text{Ending Work}[/tex] in Process [tex]100\%[/tex]         [tex]30,000[/tex]               [tex]30\%[/tex]          [tex]9000[/tex]

[tex]\text{Total equivalent units}[/tex]                     [tex]165,000[/tex]                               [tex]144,00[/tex]

Therefore, the equivalent units of conversion is [tex]144,000 \text{ units}.[/tex]              

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