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	317,520	Completed and transferred to the Mixing Department	?
Materials	908,010
Conversion	538,050
Inventory, May 31	?

The May 1 work in process inventory consisted of 81,000 pounds with $193,590 in materials cost and $123,930 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, 351,000 pounds were started into production. The May 31 inventory consisted of 77,000 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

	UNITS TO BE ACCOUNTED FOR:	Physical Units
	Work in process, May 1	81000
	Started into production during June	351000
	Total Units	432000
	UNITS ACCOUNTED FOR:		Equivalent Units
		Physical Units	Direct Material	Conversion Costs
	Units completed and transferred	355000	355000	355000
	Work in process, May 31	77000	77000	46200
1)	Equivalent units	432000	432000	401200
	COSTS TO ACCOUNT FOR:		Direct Material	Conversion Costs	Total Cost
	Cost of WIP, May 1		$        1,93,590	$     1,23,930	$      3,17,520
	Costs incurred in May		$        9,08,010	$     5,38,050	$   14,46,060
	Total costs to account for		$     11,01,600	$     6,61,980	$   17,63,580
	Equivalent units		432000	401200
2)	Cost per equivalent unit		$                2.55	$             1.65
	COSTS ACCOUNTED FOR:
4)	Cost of units completed and transferred		$        9,05,250	$     5,85,750	$   14,91,000
3)	Cost of ending WIP		$        1,96,350	$         76,230	$      2,72,580
	Total costs accounted for		$     11,01,600	$     6,61,980	$   17,63,580