Question 1

A chemical plant uses the weighted average method of process costing. 
Opening work-in-progress (WIP) was 2,000 units (60% complete as to conversion).
During the period, 8,000 units were started.
Closing WIP was 3,000 units (40% complete as to conversion).
There were no normal or abnormal losses.

What are the equivalent units for conversion costs?

Accepted Answer

First, find units completed and transferred out (Opening + Started - Closing). Then, for weighted average, add the equivalent units of closing WIP. Ignore the completion percentage of opening WIP.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Trying to use the FIFO method and subtracting the opening WIP equivalent units.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 2

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