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	52,000	100	%		40	%
Work in process inventory, May 31	32,000	100	%		25	%
Materials cost in work in process inventory, May 1				$	45,500
Conversion cost in work in process inventory, May 1				$	12,100
Units started into production					246,000
Units transferred to the next production department					266,000
Materials cost added during May				$	55,820
Conversion cost added during May				$	174,220

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) Equivalent Units :-

	Materials	Conversion
Units Transferred to next department	266000	266000
Ending WIP	32000	(32000 * 25%) =8000
EUP	298000	274000

(2) Cost per Equivalent Unit :-

	Materials	Conversion
Cost of Beginning WIP	$45500	$12100
Cost during May	$55820	$174220
Total cost (a)	$101320	$186320
EUP   (b)	298000	274000
Cost per EUP (a/b)	$0.34	$0.68

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

Material = 32000 * $0.34 = $10880

Conversion = 8000 * $0.68 = $5440

Total = $10880 + $5440 = $16320

(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 = 266000 * $0.34 = $90440

Conversion = 266000 * $0.68 = $180880

Total = $90440 + $180880 = $271320