Question

Equivalent Units Calculations—Weighted Average Method

Ferris Corporation makes a powdered rug shampoo in two sequential departments, Compounding and Drying. Materials are added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Ferris uses the weighted average method of process costing. In the Compounding Department, beginning work in process was 12,000 pounds (70% processed), 111,000 pounds were started in process, 108,000 pounds transferred out, and ending work in process was 70% processed.

Calculate equivalent units for March 2016 for the Compounding Department.

Ferris Corporation Flow of Units and Equivalent Units Calculation, March 2016
		Equivalent Units
		% Work done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer%	Answer	Answer%	Answer
Ending Inventory	Answer	Answer%	Answer	Answer%	Answer
Total	Answer		Answer		Answer

Answer 1

--Note: Ending Inventory = 12000 + 111000 - 108000 transferred = 15,000 units

Ferris Corporation
Flow of Units and Equivalent Units Calculation, March 2016
		Equivalent Units
		% Work	Direct	% Work	Conversion
		done	Materials	Done	Costs
Complete/Transferred	108,000	100%	108,000	100%	108,000
Ending Inventory	15,000	100%	15,000	70%	10,500
Total	123,000		123,000		118,500