[SoCalCPA]

Given to formulas in the book, I don’t see how the answer per Becker makes sense (unless there is an exception, which is possible given the structure of the question). It would be great if someone else could answer the question!

Q) # of units Cost of materials

Beginning WIP: 15,000 $5.500

Started in April: 40,000 18,000

Units completed: 42,500

Ending WIP: : 12,500

All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit for materials is?

A) $23,500/55,000 = $0.43

The numerator makes sense, because the formula is (beginning cost + current cost). But for the numerator, it should be units completed + ending wip (42,500+ 12,500). However, the answer in the Becker states “all materials are added at the beginning of the process, which is why beginning inventory, plus “started”, equals “available.” (which would equal $55,000 as well).

I can memorize this, but if anyone could shed some light onto this topic, it would be much appreciated! Thanks!

B - (4/2012)
A - (5/2012)
R - (1/2012) Done!
F - (10/2011) Done!

[Excited_CPA]

Hi SoCalCPA,

I'm studying for BEC now to, so hopefully I can help out some.

I think Becker is just showing that

Beginning Inventory, plus Units Started

-is equal to-

Ending Inventory, plus Units Completed

So you're right in your thinking that it should be ending inventory plus units completed (which is the way Becker taught it). But just know that it's also equal to Beginning Inventory plus Units Started.

BEC 04/14/12 87
FAR 08/28/12 88
AUD 10/06/12 94
REG 02/09/13 91

[Author]

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