Question

Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:

Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.

Calculate the equivalent units of conversion.

Answer 1

Calculation of equivalent units of production
Particulars	units	Percentage of Conversion	Equivalent units of Production
Units completed and transferred out	330000	100%	330000
Ending Inventory (30000*10%)	30000	10%	3000
Total Equivalent units of production (330000+3000)			333000

Calculation of total cost of conversion
Costs in beginning Work in Process - Conversion	$          79,700
Costs incurred in October - Conversion	$        919,300
Total cost of conversion (79700+919300)	$        999,000

Calculation of the equivalent units of conversion
Total cost of conversion (79700+919300)	$        999,000
Total Equivalent units of production (330000+3000)	333000
Equivalent units of conversion (999000/333000)	$               3.00