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 1 381,800 Completed and transferred to the Mixing Department ? Materials 637,600 Conversion 359,480 Inventory, May 31 ? The May 1 work in process inventory consisted of 115,000 pounds with $228,850 in materials cost and $152,950 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, 288,000 pounds were started into production. The May 31 inventory consisted of 124,000 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

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

Units completed and transferred out = 115000+288000-124000 = 279000

	Material	Conversion
Unit transferred out	279000	279000
Ending work in process	124000	124000*60% = 74400
Equivalent unit of production	403000	353400

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

	Material	Conversion
Beginning work in process	228850	152950
Cost added	637600	359480
Total Cost	866450	512430
Equivalent unit	403000	353400
Cost per equivalent unit	2.15	1.45

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

	Material	Conversion	Total
Cost of ending work in process	124000*2.15 = 266600	74400*1.45 = 107880	374480

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

	Material	Conversion	Total
Cost of units transferred out	279000*2.15 = 599850	279000*1.45 = 404550	1004400