Question

Pierce & Company provides the following information concerning the work in process at its plant:

• Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 61 percent complete).
• Started this month, 59,200 units.
• Transferred out, 49,700 units.
• Ending inventory, 19,400 units (materials are 100 percent complete; conversion costs are 16 percent complete).

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
A	Materials
B	Conversion costs

Answer 1

Solution

		Equivalent Units
a.	Materials	69,100
b.	Conversion costs	52,804

Calculations:

Under Weighted average method, Equivalent units,

i. For Materials

	Materials
	% of Completion	Equivalent units
Units Transferred out	100%	49,700
Ending inventory	100%	19,400
Total Equivalent units		69,100

ii.For conversion:

	Conversion
	% of Completion	Equivalent units
Units Transferred out	100%	49,700
Ending inventory (19,400 x 16%)	16%	3,104
Total Equivalent units		52,804

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