Binsder Company uses the weighted-average method in its process costing system.

Question

Binsder Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 9,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. An additional 55,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 10,000 units in the ending work in process inventory of the Assembly Department that were 50% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?



a. 54,000 b. 56,000 c. 59,000 d. 55,400

Explanation / Answer

Units in Beginning inventory = 9,000. Transferred in = 55,000. Total to account for = 9,000 + 55,000 = 64,000. Ending inventory = 10,000. Completed and transferred out = 64,000 – 10,000 = 54,000. Completed and transferred out are 100% complete, so there were 54,000 equivalent units that were completed and transferred out. Ending inventory are 50% complete with respect to conversion costs, so there are 10,000*50% = 5,000 equivalent units in ending inventory. 54,000 equivalent units + 5,000 equivalent units = 59,000 equivalent units. Answer: C, 59,000.

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