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	137,970	Completed and transferred to the Mixing Department	?
Materials	630,260
Conversion	215,880
Inventory, May 31	?

The May 1 work in process inventory consisted of 73,000 pounds with $102,930 in materials cost and $35,040 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, 394,000 pounds were started into production. The May 31 inventory consisted of 122,000 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

Solution 1:

Weston Products
Production Cost report - Grinding Department
Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	73000
Started into Production	394000
Total units to account for	467000
Units accounted for:
Unit completed & Transferred out	345000	345000	345000
Units in ending inventory:	122000
Material (100%)		122000
Conversion (60%)			73200
Equivalent units of production	467000	467000	418200

Solution 2:

Weston Products Computation of Cost per equivalent unit - Grinding Department
Particulars	Material	Conversion	Total
Opening WIP	$102,930	$35,040	$137,970
Cost Added during Period	$630,260	$215,880	$846,140
Total cost to be accounted for	$733,190	$250,920	$984,110
Equivalent units of production	467000	418200
Cost per Equivalent unit	$1.57	$0.60

Solution 3 & 4:

Weston Products Computation of Cost of ending WIP and units completed & transferred out - Grinding Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	122000	73200
Cost per equivalent unit	$1.57	$0.60
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$191,540	$43,920	$235,460
Units completed and transferred	345000	345000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$541,650	$207,000	$748,650