Question

Weighted-average method, equivalent units. The assembly division of Fenton Watches, Inc., uses the weighted-average method of process costing. Consider the following data for the month of May 2014:

Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.

Answer 1

Given information,

Work-in-process (WIP), beginning inventory (May 1, 2014)	= 80 units
Direct material cost in beginning WIP	=$493,360
Conversion costs in beginning WIP	=$91,040
Units placed in to production during May	= 500 units
Units completed at the end of the month May	= 460 units
Work-in-process (WIP), closing inventory (May 31, 2014)	= 120 units
Direct material consumed during May, 2014	=$3,220,000
Conversion costs during May, 2014	=$1,392,000

Weighted Average Method of Process Costing:

Computation of physical units of output and equivalent units for direct materials and conversion costs and their respective costs per equivalent unit of assembly division for the month of May, 2014 based on weighted-average method of process costing.

Statement showing Step 1-Summarizing the physical units and Step 2-Equivalent units using weighted - average method for assembly division of F W, Inc.,

For the month of May, 2014

Flow of Production	(Step 1)	(Step 2)
	Physical Units	Equivalent Units
		Direct Materials	Conversion Costs
Work-in-process (WIP), beginning (given)	80
Started during current period (given)	500
To account for	580
Completed and transferred out in current period	460	460	460
Work-in-process (WIP), ending*(given)	120
		72	36
Accounted for	580
Equivalent units of work done to date		532	496
* Given, degree of completion in assembly division; direct material, 60%; conversion costs, 30%.

Therefore, based on weighted average method of process costing equivalent units of direct materials are 532units and equivalent units of conversion costs are 496units.