Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,300 units. The costs and percentage completion of these units in beginning inventory were:Cost PercentCompleteMaterials costs $ 6,600 65%Conversion costs $ 7,700 45%A total of 8,300 units were started and 6,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:CostMaterials costs $ 126,400Conversion costs $ 207,900The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. What are the equivalent units for conversion costs for the month in the first processing department

 7,780 units

Explanation:

When using the weighted-average method in its process costing system we are only interested in the equivalent units of the output in that particular process. Outputs being Units completed and transferred and units in ending work in process.

Units in Ending Work in Progress calculation

Units in Ending Work in Progress = 1,300 units + 8,300 units - 6,800 units

                                                       = 2,800 units

Conversion Costs

Units completed and transferred (6,800 x 100%)             6,800

Units in Ending Work in Progress (2,800 x 35 %)                980

Equivalent units of Production  - Conversion Costs         7,780

Conclusion

the equivalent units for conversion costs for the month in the first processing department are   7,780 units

yes the correct answer was

b.the increased supply will create a surplus.