Question

Zeus Corporation produces cultured diamonds via a secretive process that grows the diamonds in a vacuum chamber filled with a carbon gas cloud. The diamonds are produced in a single continuous process and Zeus uses the weighted-average process costing method of accounting for production.

The production process requires constant utilization of facilities and equipment, as well as direct labor by skilled technicians. As a result, direct labor and factory overhead are both deemed to be introduced uniformly throughout production.

At the beginning of June, 20X9, 4,500 diamonds were in process. During June, an additional

8,500 diamonds were started. 7,500 diamonds were completed and transferred to finished goods.

As of the beginning of the month, work in process was 90% complete with respect to materials and 70% complete with respect to conversion costs.

As of the end of the month, work in process was 80% complete with respect to materials and 50% complete with respect to conversion costs.

Prepare a "unit reconciliation" schedule that includes calculations showing the equivalent units of materials, direct labor, and factory overhead for June.

	A.	Equivalent units of direct material 11960 Equivalent units of direct labor 10280 Equivalent units of overhead 10280
	B.	Equivalent units of direct material 11870 Equivalent units of direct labor 10160 Equivalent units of overhead 10160
	C.	Equivalent units of direct material 11980 Equivalent units of direct labor 10230 Equivalent units of overhead 10230
	D.	Equivalent units of direct material 11650 Equivalent units of direct labor 10320 Equivalent units of overhead 10320
	E.	Equivalent units of direct material 11900 Equivalent units of direct labor 10250 Equivalent units of overhead 10250
	F.	None of the above

Answer 1

Answer

• Correct Answer = Option ‘E’

E.	Equivalent units of direct material 11900 Equivalent units of direct labor 10250 Equivalent units of overhead 10250

• Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion [Labor + Overhead]	EUP – Conversion [Labor + Overhead]
Units TRANSFERRED	7,500	100%	7,500	100%	7,500
Units of ENDING WIP [4500 + 8500 – 7500]	5,500	80%	4,400	50%	2,750
Equivalent Units of Production			11,900		10,250