Question

The Carlberg Company has two manufacturing departments, assembly and painting. The assembly department started 10,000 units during November. The following production activity unit and cost information refers to the assembly department’s November production activities.

Assembly department	Units	Percent of direct material added	Percent of conversion added
Beginning work-in-process	2,000	60%	40%
Units transferred out	9,000	100	100
Ending work-in-process	3,000	80	30

Beginning work-in-process
Inventory – assembly department	\(1,581 (includes \)996 for direct materials and \(585 for conversion)
Costs added during the month:
Direct materials	\)10,404
Conversion	$12,285

Required

Calculate the assembly department’s equivalent units of production for materials and for conversion for November. Use the weighted-average method.

Short answer

Equivalent units under the weighted average method:

1. Material:11,400
2. Conversion:9,900

Step-by-step solution

Definition of Process costing

The cost method used by the business entity that produces a higher number of products with similar specifications is known as process costing. Under this method, the total cost incurred by the business entity is allocated to each unit by dividing the total cost by the total units produced.

Equivalent units for material

Particular	Units
Units transferred out	9,000
Units of ending work-in-process	2,400
Equivalent units	11,400

Equivalent units for conversion

Particular	Units
Units transferred out	9,000
Units of ending work-in-process	900
Equivalent units	9,900