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	71,000	100	%		30	%
Work in process inventory, May 31	51,000	100	%		20	%
Materials cost in work in process inventory, May 1				$	56,700
Conversion cost in work in process inventory, May 1				$	16,800
Units started into production					260,600
Units transferred to the next production department					280,600
Materials cost added during May				$	125,680
Conversion cost added during May				$	242,012

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

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

	Direct material	Conversion
Unit transferred out	280600	280600
Ending work in process	51000	51000*20% = 10200
Equivalent unit of production	331600	290800

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

	Direct material	Conversion
Beginning work in process	56700	16800
Cost added	125680	242012
Total Cost	182380	258812
Equivalent unit	331600	290800
Cost per equivalent unit	0.55	0.89

3. Compute the first production 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	51000*.55 = 28050	10200*.89 = 9078	37128

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.

	Material	Conversion	Total
Cost of units transferred out	280600*.55 = 154330	280600*.89 = 249734	404064