Adams Company’s production cycle starts in Department A. The following information is available for July: Work i process, July 1 (60% complete) Started in July Work in process, July 31 (30% complete) Units 150,000 720,000 80,000 Materials are added at the beginning of the process in Department A. Using the weighted-average method, what are the equivalent units of production for materials and conversion costs for the month of July, respectively?
720,000; 744,000
870,000; 814,000
734,000; 720,000
795,000; 734,000
None of the above
Answer:
First calculate the unit transferred out as under
unit transferred out
= Units started at the period + Beginning inventory – End. Inventory3=
= 720,000 + 150,000 – 80,000
= 790,000
unit transferred out = 790,000
Now find out the equivalent units of production for materials and conversion costs for the month of July as under
Calculation of the equivalent units of production for materials and conversion costs for the month of July
| Material | Conversion | |||
| Units transferred out (790,000) | 100% | 790000 | 100% | 790000 |
| EU in ending inventory (80000) | 100% | 80000 | 30% | 24000 |
| 870000 | 814000 |
so, answer is 870,000; 814,000
