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The Werner Corporation uses the weighted-average method in its process costing system.The company recorded 24,400 equivalent units for conversion costs for November in a particular department.There were 6,000 units in the ending work in process inventory on November 30 which were 60% complete with respect to conversion costs.The November 1 work in process inventory consisted of 5,000 units which were 40% complete with respect to conversion costs.A total of 22,000 units were completed and transferred out of the department during the month.The number of units started during November in the department was:
A) 22,000 units
B) 17,000 units
C) 26,000 units
D) 21,000 units
Weighted-Average Method
An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all goods available for sale.
Conversion Costs
The expenses incurred in the process of converting raw materials into finished products, typically including labor and overhead costs.
Equivalent Units
A concept in process costing that converts partially completed units into a smaller number of fully completed units based on the percentage of completion.
- Gain an understanding of the idea of equivalent units within the realm of process costing.
- Compute equivalent units for both materials and conversion expenses using the weighted-average approach.
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Learning Objectives
- Gain an understanding of the idea of equivalent units within the realm of process costing.
- Compute equivalent units for both materials and conversion expenses using the weighted-average approach.
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