Question

Holder Incorporated uses the weighted average method for its process costing system. The Assembly Department at began March with 24,000 units in Work in Process (WIP) Inventory, all of which were completed and transferred out during March. An additional 32,000 units were started during the month, 12,000 of which were completed and transferred out during March. A total of 20,000 units remained in Work in Process Inventory at the end of March, and were at varying levels of completion as follows: Direct materials: 80 percent complete Direct labor: 60 percent complete Overhead: 70 percent complete Required: A. Determine the units to be accounted for and units accounted for. B. Calculate the equivalent units for direct materials, direct labor, and overhead.

Answer 1

--Requirement [A]

Units Reconciliation
Units to account for:
Beginning WIP	24,000
Units started this period	32,000
Total Units to account for	56,000
Total Units accounted for:
Completed & Transferred out	36,000
Ending WIP	20,000
Total Units accounted for	56,000

--Requirement [B]

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Labor	EUP - Labor	% Overhead	EUP - Overhead
Units TRANSFERRED	36,000	100%	36,000	100%	36,000	100%	36,000
Units of ENDING WIP	20,000	80%	16,000	60%	12,000	70%	14,000
Equivalent Units of Production = ANSWER			52,000		48,000		50,000

Equivalent units:
Direct material = 52000
Direct Labor = 48000
Overhead = 50000