Carrington Corporation produces canned vegetable soup. The company uses the weighted-average method in its process costing system. The company sold 300,000 units in January. Data concerning inventories follow: Inventory at January 1: Work in process None Finished goods 75,000 units Inventory at January 31: Work in process (75% complete with respect to conversion costs) 24,000 units Finished goods 60,000 units What were the equivalent units for conversion costs for January? A) 285,000 units. B) 303,000 units C) 300,000 units D) 309,000 units

Question

Allan Flynn

Business

30 July, 18:31

Carrington Corporation produces canned vegetable soup. The company uses the weighted-average method in its process costing system. The company sold 300,000 units in January. Data concerning inventories follow: Inventory at January 1: Work in process None Finished goods 75,000 units Inventory at January 31: Work in process (75% complete with respect to conversion costs) 24,000 units Finished goods 60,000 units What were the equivalent units for conversion costs for January? A) 285,000 units. B) 303,000 units C) 300,000 units D) 309,000 units

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Answers (1)

Know the Answer?

Freddy Heath · Answer 1

Option (B) is correct.

Explanation:

100% complete for conversion cost the units that are complete.

Units that produced during the period:

= Units sold + Units of finished Ending - Beginning units of Finished

= 300,000 + 60,000 - 75,000

= 285,000 units

And work in process at ending is 24,000 units but for conversion costs is 75% only.

For conversion Equivalent units:

= 75% of Ending Work in process + Units that produced during the period

= 75% * 24,000 + 285,000

= 18,000+285,000

= 303,000 units