Question

Note: This is one question

(1) Highlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below:  

		Percent Completed
	Tons of Pulp	Materials		Labor and Overhead
Work in process, June 1	81,900	81	%	26	%
Work in process, June 30	51,000	43	%	12	%
Started into production during June	302,000

Required:  

1. Compute the number of tons of pulp completed and transferred out during June.

2. Compute the equivalent units of production for materials and for labor and overhead for June.

(2) Alaskan Fisheries, Inc., processes salmon for various distributors and it uses the weighted-average method in its process costing system. The company has two processing departments—Cleaning and Packing. Data relating to pounds of salmon processed in the Cleaning Department during July are presented below:

		Percent Completed
	Pounds of Salmon	Materials		Labor and Overhead
Work in process inventory, July 1	32,000	100	%	58	%
Work in process inventory, July 31	23,000	100	%	70	%

A total of 460,000 pounds of salmon were started into processing during July. All materials are added at the beginning of processing in the Cleaning Department.

Required:

Compute the Cleaning Department's equivalent units of production for materials and for labor and overhead in the month of July.

Answer 1

Question 1

Units completed and transferred out = 332,900 units

	Material	Conversion
Equivalent Units of Production	354,830	339,020

Working

Reconciliation of Units
A	Beginning WIP	81,900
B	Introduced	302,000
C=A+B	TOTAL	383,900
D	Transferred out	332,900
E=C-D	Ending WIP	51,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	332,900			100%	332,900	100%	332,900
Ending WIP	51,000			43%	21,930	12%	6,120
Total	383,900			Total	354,830	Total	339,020

.

Question 2

	Material	labor and overhead
Equivalent Units of Production	492,000	485,100

Working

Reconciliation of Units
A	Beginning WIP	32,000
B	Introduced	460,000
C=A+B	TOTAL	492,000
D	Transferred out	469,000
E=C-D	Ending WIP	23,000

.

Statement of Equivalent Units(Weighted average)
				Material		Labor and overhead
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	469,000			100%	469,000	100%	469,000
Ending WIP	23,000			100%	23,000	70%	16,100
Total	492,000			Total	492,000	Total	485,100