Question

A company uses a process costing system. its weaving department completed and transferred out 120,000 units during the current period. the ending inventory in the weaving department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to conversion costs. determine the equivalent units of production for the weaving department for direct materials and conversion costs assuming the weighted average method.

Answer 1

120, 000 units completed
60 % is complete
This translates to 60*40,000/40
=60, 000
The equivalent units, then, are:
120,000- (60,000+40,000)
=20, 000 units