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	63,000	100	%		50	%
Work in process inventory, May 31	43,000	100	%		30	%
Materials cost in work in process inventory, May 1				$	51,800
Conversion cost in work in process inventory, May 1				$	14,700
Units started into production					247,200
Units transferred to the next production department					267,200
Materials cost added during May				$	87,790
Conversion cost added during May				$	212,181

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 unit

	Material	Conversion
Unit transferred out	267200	267200
Ending work in process	43000	43000*30% = 12900
Equivalent unit of production	310200	280100

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	51800	14700
Cost added	87790	212181
Total cost	139590	226881
Equivalent unit	310200	280100
Cost per equivalent unit	0.45	0.81

3) cost of ending work in process

	Material	Conversion	Total
Cost of ending work in process	43000*.45 = 19350	12900*.81 = 10449	29799

4) Cost of unit transferred out

	Material	Conversion	Total
Cost of unit transferred out	120240	216432	336672

5) cost reconciliation

Cost to be accounted for
Beginning WIP	66500
Cost added	299971
Total cost to be accounted for	366471
Cost accounted as
Cost of unit transferred out	336672
Cost of ending WIP	29799
Total cost accounted as	366471