Question

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-account for the Grinding Department for May is given below:

Work in Process—Grinding Department
Inventory, May 1	88,000	Completed and transferred to the Mixing Department	?
Materials	585,690
Conversion	204,050
Inventory, May 31	?

The May 1 work in process inventory consisted of 44,000 pounds with $64,680 in materials cost and $23,320 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 355,000 pounds were started into production. The May 31 inventory consisted of 123,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method in its process costing system.

Required:

1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.

2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.

3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

Answer 1

Requirement 1

	Material	Conversion
Equivalent Units of Production	3,99,000	3,49,800

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$              1.63	$              0.65

Requirement 3 and 4

	Material	Conversion	Total
Ending Inventory	$     2,00,490	$         47,970	$   2,48,460
Units Completed and transferred	$     4,49,880	$      1,79,400	$   6,29,280

Working

Reconciliation of Units
A	Opening WIP	44,000
B	Introduced	3,55,000
C=A+B	TOTAL	3,99,000
D	Transferred	2,76,000
E=C-D	Closing WIP	1,23,000

Statement of Equivalent Units
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	2,76,000			100%	2,76,000	100%	2,76,000
Closing WIP	1,23,000			100%	1,23,000	60%	73,800
Total	3,99,000			Total	3,99,000	Total	3,49,800

Cost per Equivalent Units
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost		$         64,680	$       23,320	$        88,000
Cost incurred during period		$      5,85,690	$   2,04,050	$    7,89,740
Total Cost to be accounted for		$      6,50,370	$   2,27,370	$    8,77,740
Total Equivalent Units		3,99,000	3,49,800
Cost per Equivalent Units		$              1.63	$           0.65

.

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$              1.63	1,23,000	$   2,00,490	$    2,76,000	$     4,49,880
Conversion	$              0.65	73,800	$       47,970	$    2,76,000	$     1,79,400
TOTAL	$     8,77,740	TOTAL	$   2,48,460	TOTAL	$     6,29,280