Question

Victory Company uses a weighted-average process costing to account for its production costs.

Required information [The following information applies to the questions displayed below) Victory Company uses weighted average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the work in process inventory consists of 180,000 units that are 30% complete with respect to conversion. Beginning inventory had $420,000 of direct materials and $139,000 of conversion cost. The direct material cost added in November is $2,220,000, and the conversion cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 60,000 were from beginning work in process and 640,000 units were started and completed during the period. Required: 1. Determine the equivalent units of production with respect to direct materials and conversion Equivalent Units of Production (EUP)-Weighted Average Method Units Materials EUP. Materials % Conversion EUP. Conversion Total units

Answer 1

Solution

Equivalent units of production with respect to conversion-Weighted average method
	Units	% Material	EUP-Material	% conversion	EUP-Conversion
Units Completed and transferred out	700000	100%	700000	100%	700000
Ending work in process-Units	180000	100%	180000	30%	54000
Total	880000		880000		754000

Units transferred = Units started and completed + Units in beginning inventory

Units transferred = 640000+60000=700000 units