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	171,360	Completed and transferred to the Mixing Department	?
Materials	405,020
Conversion	175,260
Inventory, May 31	?

The May 1 work in process inventory consisted of 102,000 pounds with $116,280 in materials cost and $55,080 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, 299,000 pounds were started into production. The May 31 inventory consisted of 130,000 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)
						Materials		Convesion
	Equivalent units of Production					4,01,000		3,49,000
	Working:
	# 1		Work in Process Inventory, May 1				1,02,000
			Units started during may				2,99,000
			Total Units in Process				4,01,000
			Less:Work in process, May 31				1,30,000
			Units completed and Transferred out				2,71,000
	# 2					Materials		Convesion
				Physical Units		% of completion	Equivalent units	% of completion	Equivalent units
	Units completed			2,71,000		100%	2,71,000	100%	2,71,000
	Work in Process Inventory, May 31			1,30,000		100%	1,30,000	60%	78,000
	Total			4,01,000			4,01,000		3,49,000
2)					Materials		Conversion
	Cost Per Equivalent units				$               1.30		$            0.66
	Working:
					Materials		Conversion		Total
	Inventory, May 1				$       1,16,280		$       55,080		$   1,71,360
	Cost incurred during May				$       4,05,020		$   1,75,260		$   5,80,280
	Total costs				$       5,21,300		$   2,30,340		$   7,51,640
	/ Equivalent units of production				4,01,000		3,49,000
	Cost per Equivalent units of production				$               1.30		$            0.66		$           1.96
3)
					Materials		Conversion		Total
	Cost of ending work in process				$       1,69,000		$       51,480		$   2,20,480
	Working:
					Equivalent units		Cost per Equivalent unit		Total
	Materials				1,30,000		$            1.30		$   1,69,000
	Conversion				78,000		$            0.66		$      51,480
	Total								$   2,20,480
4)
					Materials		Conversion		Total
	Cost of units transferred out				$       3,52,300		$   1,78,860		$   5,31,160
	Working:
					Equivalent units		Cost per Equivalent unit		Total
	Materials				2,71,000		$            1.30		$   3,52,300
	Conversion				2,71,000		$            0.66		$   1,78,860
	Total								$   5,31,160