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	307,000	Completed and transferred to the Mixing Department	?
Materials	709,250
Conversion	280,600
Inventory, May 31	?

The May 1 work in process inventory consisted of 100,000 pounds with $219,000 in materials cost and $88,000 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, 295,000 pounds were started into production. The May 31 inventory consisted of 88,000 pounds that were 100% complete with respect to materials and 70% 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.

	Materials	Conversion
Units completed and transferred	307000	307000
Ending work in process	(88000*100%)= 88000	(88000*70%)= 61600
Equivalent units of production	395000	368600

Units completed and transferred= Beginning work in process+Units started-Ending work in process

= 100000+295000-88000= 307000

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

	Materials	Conversion
Cost of beginning work in process	$219000	$88000
Cost added during May	709250	280600
Total costs	$928250	$368600
Equivalent units of production	395000	368600
Cost per equivalent unit	$2.35	$1.00

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

	Materials	Conversion
Ending work in process	88000	61600
Cost per equivalent unit	$2.35	$1.00
Cost of ending work in process inventory	$206800	$61600	$268400

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

	Materials	Conversion	Total
Units completed and transferred	307000	307000
Cost per equivalent unit	$2.35	$1.00
Cost of ending work in process inventory	$721450	$307000	$1028450