Asked by Allyson Welch on Jun 21, 2024
Verified
Bims Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 5,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 68,500 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 33,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?
A) 40,500
B) 96,500
C) 56,800
D) 60,300
Conversion Costs
Costs incurred to convert raw materials into finished products, including direct labor and manufacturing overhead.
Weighted-Average Method
An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar goods available during the period.
Assembly Department
A production division where various components are assembled to form a finished product.
- Gain insight into the idea of equivalent units in regard to materials and the expenses involved in conversion within process costing.
- Gain the capability to calculate the cost per equivalent unit for conversion costs in several circumstances.
Verified Answer
Units in beginning work in process inventory: 5,000
Units started during the month: 68,500
Total units to account for: 73,500
To calculate equivalent units, we need to account for the percentage of completion of units in beginning work in process inventory and units completed during the month:
Equivalent units for units in beginning work in process inventory: 5,000 x 70% = 3,500
Equivalent units for units started during the month: 68,500 x 100% = 68,500
Equivalent units for units in ending work in process inventory: 33,000 x 60% = 19,800
Total equivalent units for conversion costs: 3,500 + 68,500 + 19,800 = 91,800
Therefore, the answer is D) 60,300.
Learning Objectives
- Gain insight into the idea of equivalent units in regard to materials and the expenses involved in conversion within process costing.
- Gain the capability to calculate the cost per equivalent unit for conversion costs in several circumstances.
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