Asked by Brianna Austin on Jul 22, 2024
Verified
Nabais Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below: What were the equivalent units for conversion costs in the Lubricating Department for October?
A) 31,780
B) 33,280
C) 32,200
D) 29,200
Conversion Costs
Expenses associated with transforming raw materials into complete goods, which encompass both direct labor and the costs of manufacturing overhead.
Weighted-Average Method
An inventory costing method that assigns a cost to inventory on the basis of the average cost of all similar items in the inventory.
Lubricating Department
A specialized division in a manufacturing or maintenance facility focused on the application of lubricants to machinery and equipment to reduce friction and wear.
- Examine and calculate equivalent units within a process costing framework through the application of the weighted-average approach.
Verified Answer
Equivalent units for conversion costs = Units completed and transferred out + Equivalent units in ending work in process inventory
Units completed and transferred out = 28,000
Equivalent units in ending work in process inventory = (30% x 7,000) + (100% x 4,000) = 2,100 + 4,000 = 6,100
Equivalent units for conversion costs = 28,000 + 6,100 = 33,100
Therefore, the answer is B, 33,280 (rounded to the nearest whole number).
Learning Objectives
- Examine and calculate equivalent units within a process costing framework through the application of the weighted-average approach.
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