Question

In: Accounting

Exercise 4-8 Equivalent Units; Cost per Equivalent Unit; Assigning Costs to Units-Weighted-Average Method [LO4-2, LO4-3, LO4-4]...

Exercise 4-8 Equivalent Units; Cost per Equivalent Unit; Assigning Costs to Units-Weighted-Average Method [LO4-2, LO4-3, LO4-4]

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 74,000 100 % 30 %
Work in process inventory, May 31 54,000 100 % 20 %
Materials cost in work in process inventory, May 1 $ 58,800
Conversion cost in work in process inventory, May 1 $ 17,500
Units started into production 262,400
Units transferred to the next production department 282,400
Materials cost added during May $ 143,040
Conversion cost added during May $ 252,244

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.

Solutions

Expert Solution

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

Physical unit % EUP-material % EUP-conversion cost
Units transferred out 282400 100% 282400 100% 282400
Ending work in process 54000 100% 54000 20% 10800
Total 336400 336400 293200

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

Material Conversion cost
Beginning wip 58800 17500
Cost added during period 143040 252244
Total cost 201840 269744
Equivalent unit 336400 293200
Cost per equivalent unit 0.60 0.92

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

Material conversion cost Total
Cost of ending work in process 54000*.60=32400 54000*20%*.92=9936 42336

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 cost Total
Cost of units transferred 282400*.60=169440 282400*.92=259808 429248

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