How many equivalent units for conversion costs were in process March using the weighted average method?

Question

Beginning inventory in March consisted of 20,000 units (60 percent converted) and ending inventory consisted of 40,000 units (30 percent converted). In addition, 100,000 units were started during the period.

How many equivalent units for conversion costs were in process March using the weighted average method?

Answer 1

Using weighted average process costing, we use the following formula to calculate equivalent units:

Beginning Inventory + Units Started During Period - Ending Inventory Units = Units Completed

20,000 . + . 100,000 - 40,000 = 80,000

Equivalent Units is converting partially completed units to "whole units"

80,000 units are already completed fully.

So, 80,000 units x 100% = 80,000 units completed

40,000 units are left in ending inventory. They are only 30% completed.

40,000 x 30% = 12,000

Total Equivalent Units for Conversion Costs = 80,000 + 12,000 = 92,000 Equivalent Units