Question

Brody Corp. uses a process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,080 units that were 55% completed. 10,500 units were started into the process during January. On January 31, the inventory consisted of 600 units that were 30% completed. What would be the equivalent units for conversion cost using the weighted average method?

Answer 1

Correct answer is 11,160 units

Explanation:

Equivalent units are those units which would have been completed , if all the work performed is done on the  completed units only and none of the units are incomplete at the end of the period. Hence, to find the equivalent number of units first,we have to find the units actually completed during the year:

Step 1 : Calculation of unit completed during the period :

It is calculated as follows: Opening Work in progress+ Units introduced during the period-closing work in progress

Putting the value : 1080 units+10500-600=10,980 units

Step 2 : Calculation of equivalent units :

Equivalent units= Units completed during the year-Equivalents units in ending work in progress(In this question we require for conversion cost)

= 10980 units+ (600 units *30%)

=10,980 units+180

=11,160 units