Question & Answer: Barker Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in t…..

MC Qu. 92 Barker Corporation uses the weighted-average …

Barker Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 300 units. The costs and percentage completion of these units in beginning inventory were:

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Cost Percent Complete
Materials costs $7,400 85%
Conversion costs $4,900 55%

A total of 9,100 units were started and 8,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Materials costs $240,300
Conversion costs $242,400

The ending inventory was 85% complete with respect to materials and 20% complete with respect to conversion costs.

Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.

What are the equivalent units for conversion costs for the month in the first processing department?

A) 8,840

B) 9,400

C) 140

D) 8,700

Expert Answer

 

A) 8,840

In case of weighted Average method,
Equivalent Units for conversion cost = Physical Units x % of completion
= (Units completed x 100%)+(Units in ending work in process x 20%)
= (8,700*100%)+(700*20%)
= 8,840
Working:
Beginning Work in process units 300
Add:Units started during the period 9,100
Less:Units completed and transferred 8,700
Ending units in work in process 700

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