2. Clarke Company uses the weighted-average method in its process costing system. The
following data were taken from the company’s accounting records. The company’s beginning
work in process inventory, which was 100% complete as to materials and 70% complete as to
conversion, was comprised of 120,000 units. 360,000 units were started in process during the
period. The company’s ending work in process inventory, which was 100% complete as to
materials and 60% complete as to conversion, was comprised of 80,000 units.
Part (a) How many units were transferred out during the month?
Part (b) What were the equivalent units of production for conversion costs for the month?
Part (a) Solution (Learning Objective 2):
The units were transferred out during the month would be determined as follows.
First, account for all units in the processing department in order to determine the units in
ending inventory (which is required in order to compute the equivalent units).
Started (transferred in)
Total units to be
(A)Units in beginning inventory + Units started = Total units to be accounted for
120,000 + 360,000 = 480,000
(B) Units to be accounted for = Total units accounted for
480,000 (from A) = 480,000 (B)
(C) Units completed + Units in ending inventory = Total units accounted for
Units completed + 80,000 =480,000
Units completed (and transferred out) = 400,000 (C)