Question

Conlon Chemicals manufactures paint thinner. Information on the work in process follows: Beginning inventory, 40,600 partially...

Conlon Chemicals manufactures paint thinner. Information on the work in process follows:

Beginning inventory, 40,600 partially complete gallons.
Transferred out, 207,800 gallons.
Ending inventory (materials are 18 percent complete; conversion costs are 8 percent complete).
Started this month, 235,500 gallons.

Required: a. Compute the equivalent units for materials using the weighted-average method. b. Compute the equivalent units for conversion costs using the weighted-average method.

Equivalent Units (Gallons)
A Materials
B Conversion Costs
Business   Accounting   
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Homework Answers

Answer #1

Computation of Equivalent units of material and conversion cost using Weighted Average Methods:

Ending Inventory = Beginning Inventory + Started this month - Transferred out

= 40600 gallons + 235500 gallons - 207800 gallons

= 68300 gallons

A.

Equivalent units for Material = Units Transferred out + Ending Inventory x Percentage of completion

= 207800 gallons + 68300 gallons x 18%

= 207800 gallons + 12294 gallons

= 220094 gallons.

B.

Equivalent units for Conversion cost = Units Transferred out + Ending Inventory x Percentage of completion

= 207800 gallons + 68300 gallons x 8%

= 207800 gallons + 5464 gallons

= 213264 gallons.

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