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	281,600	Completed and transferred to the Mixing Department	?
Materials	680,600
Conversion	503,280
Inventory, May 31	?

The May 1 work in process inventory consisted of 80,000 pounds with $155,200 in materials cost and $126,400 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, 318,000 pounds were started into production. The May 31 inventory consisted of 92,000 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

Solution

	Material	Conversion
Equivalent Units of Production	398,000	370,400

.

	Material	Conversion
Cost per equivalent Unit	$                    2.10	$                   1.70

.

	Material	Conversion	Total
Ending Inventory	$ 193,200	$ 109,480	$ 302,680

.

	Material	Conversion	Total
Units Completed and transferred	$ 642,600	$ 520,200	$ 1,162,800

Working

Reconciliation of Units
A	Beginning WIP	80,000
B	Introduced	318,000
C=A+B	TOTAL	398,000
D	Transferred out	306,000
E=C-D	Ending WIP	92,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	306,000			100%	306,000	100%	306,000
Ending WIP	92,000			100%	92,000	70%	64,400
Total	398,000			Total	398,000	Total	370,400

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 155,200	$ 126,400	$ 281,600
Cost incurred during period		$ 680,600	$ 503,280	$ 1,183,880
Total Cost to be accounted for		$ 835,800	$ 629,680	$ 1,465,480
Total Equivalent Units		398,000	370,400
Cost per Equivalent Units		$                   2.10	$                     1.70	$                3.80

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 2.10	92,000	$        193,200.00	306,000	$        642,600.00
Conversion cost	$ 1.70	64,400	$        109,480.00	306,000	$        520,200.00
TOTAL	$ 1,465,480	TOTAL	$ 302,680	TOTAL	$ 1,162,800