Question

Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. Equivalent units of production for the year are:

Beginning inventory of Work in Process (40% complete, $1,100) 200 units
Ending inventory of Work in Process (80% complete) 400 units
Total units started during the year 3,200 units
A.3,200 units.
B.3,320 units.
C.3,240 units.
D.3,520 units.
E.3,800 units.

Answer 1

Answer:

Equivalent units of production for the year are B.3,320 units

Explanation:

Equivalent Units is a concept used to determine the number of completed units in terms of their degree of completion in the process

Step 1 Calculate the Number of Units Completed and Transferred Out of the Process

Hint : Units IN must equal Units OUT

Units Completed and Transferred Out = Beginning inventory of Work in Process + Units Started during the year - Ending inventory of Work in Process

Units Completed and Transferred Out = 200 + 3200 - 400 = 3,000

Step 2 Calculate to Total Equivalent Units of Production for the year on percentage of Completion

Completed and Transfered Out - 100%      3,000

Ending Work In Process Inventory - 80%      320

Total Equivalent Units                                  3,320