Whittall textiles makes a variety of rugs. All materials are added at the start

Question

Whittall textiles makes a variety of rugs. All materials are added at the start of production and conversion costs are incurred evenly throughout. The weaving dept. had 2000 units of WIP on January 1 that were 30% complete as to conversion. During the year 9000 units were completed and on December 31, 4000 units were still in production with 40% of conversion complete. Using the weighted average method for process costing, the equivalent units with respect to conversion for the year were: 12600 EUP, 10600 EUP, 9000 EUP, or 11200 EUP

Explanation / Answer

weighted average equivalent units with respect to conversion

= Completed Units for the Year + 40% of the Closing Inventory

= 9000 + (4000 * 40/100)

= 9000 + 1600

= 10,600 EUP

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