Question

Helix Corporation uses the weighted-average method in its process costing system. It produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow:

		Percent Complete
	Units	Materials			Conversion
Work in process inventory, May 1	74,000	100	%		30	%
Work in process inventory, May 31	54,000	100	%		20	%
Materials cost in work in process inventory, May 1				$	58,800
Conversion cost in work in process inventory, May 1				$	17,500
Units started into production					262,400
Units transferred to the next production department					282,400
Materials cost added during May				$	143,040
Conversion cost added during May				$	252,244

Required:

1. Calculate the first production department's equivalent units of production for materials and conversion for May.

2. Compute the first production department's cost per equivalent unit for materials and conversion for May.

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

4. Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May.

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	336,400	293,200

.

	Material	Conversion
Cost per equivalent Unit	$                                0.60	$                   0.92

.

	Material	Conversion	Total
Ending Inventory	$ 32,400	$ 9,936	$ 42,336

.

	Material	Conversion	Total
Units Completed and transferred	$ 169,440	$ 259,808	$ 429,248

Working

Reconciliation of Units
A	Beginning WIP	74,000
B	Introduced	262,400
C=A+B	TOTAL	336,400
D	Transferred out	282,400
E=C-D	Ending WIP	54,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	282,400			100%	282,400	100%	282,400
Ending WIP	54,000			100%	54,000	20%	10,800
Total	336,400			Total	336,400	Total	293,200

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 58,800	$ 17,500	$ 76,300
Cost incurred during period (B)		$ 143,040	$ 252,244	$ 395,284
Total Cost to be accounted for (C=A+B)		$ 201,840	$ 269,744	$ 471,584
Total Equivalent Units(D)		336,400	293,200
Cost per Equivalent Units (E=C/D)		$                   0.60	$                     0.92	$                        1.52

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.60	54,000	$          32,400.00	282,400	$        169,440.00
Conversion	$ 0.92	10,800	$             9,936.00	282,400	$        259,808.00
TOTAL	$ 471,584	TOTAL	$ 42,336	TOTAL	$ 429,248