The manager at Puppet and Doll Factory reported 50,000 units of direct materials in the processing division. All direct materials are placed in the processing at the beginning of the process and conversion costs occur evenly during the process

The managerial accountant uses the weighted-average costing method and their first goal was to have 10,000 left in processing and 20% converted to factory and labor overhead.

Required
a. Determine the total equivalent units in process and transferred out for direct materials and conversion costs, assuming there is no beginning inventory.
b. With the installation of a new sewing machine, the forecast for the end of the month was to have 2,000 left in process and 80 % converted as to labor and factory overhead. Compute the equivalent units in process and transferred out for direct materials and conversion costs, assuming there was no beginning inventory.
What will be an ideal response?

a. Direct materials:
Beginning inventory 0 units
Units started 50,000 units
Equivalent units 50,000 units

Conversion costs:
Beginning inventory 0 units
Units started 50,000 units
To account for 50,000 units
Units transferred out 40,000 units
Ending inventory 10,000 units

Units transferred out 40,000 units
Ending inventory, 20% complete 2,000 units
Equivalent units 42,000 unit

b. Direct materials:
Beginning inventory 0 units
Units started 50,000 units
Equivalent units 50,000 units

Conversion costs:
Beginning inventory 0 units
Units started 50,000 units
To account for 50,000 units
Units transferred out 40,000 units
Ending inventory 10,000 units

Units transferred out 40,000 units
Ending inventory, 80% complete 8,000 units
Equivalent units 32,000 units