Question

Narver Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below:




Units Percent Complete with Respect to Conversion

Beginning work in process inventory 6,600 60%

Transferred in from the prior department during October 40,100

Completed and transferred to the next department during October

37,100

Ending work in process inventory 9,600 80%



What were the equivalent units for conversion costs in the Lubricating Department for October?

Answer 1

Answer:

44,780 units

Explanation:

When a company uses the weighted average method in its process costing system, the beginning inventory nor the units transferred in are included in the calculations for equivalent units. Only units transferred out and ending inventory are use to calculate equivalent units:

equivalent units = units transferred out + (ending inventory x % of completion)}

equivalent units = 37,100 units + (9,600 units x 80%) = 37,100 units + 7,680 units = 44,780 units