O\'Malley Corp. uses a weighted average process costing system. Material is adde

Question

O'Malley Corp. uses a weighted average process costing system. Material is added at the beginning of the production process and overhead is applied on the basis of direct labor. O'Malley's records indicate that 70,000 units were in process at the beginning of May 2010; these units were 35 percent complete as to conversion. In May, the company started 445,300 and completed 427,500 units. May's ending inventory was 30 percent complete as to conversion.


b. What are the equivalent units of production for conversion?

Explanation / Answer

Weighted average process costing system (FIFO) Unit 1=70,000 Out of 4,45,300 units company completed 4,27,500 units a)24,500+17,800=42,300 is equivalent units of production for direct material. b)4,27,500+5340=4,32,840 is the equivalent unit of production for conversion.

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