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	75,000	100	%		50	%
Work in process inventory, May 31	55,000	100	%		30	%
Materials cost in work in process inventory, May 1				$	59,400
Conversion cost in work in process inventory, May 1				$	17,400
Units started into production					252,000
Units transferred to the next production department					272,000
Materials cost added during May				$	126,990
Conversion cost added during May				$	250,905

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

Requirement 1

	Material	Conversion
Equivalent Units of Production	327,000	288,500

.Requirement 2

	Material	Conversion
Cost per equivalent Unit	$                    0.57	$                   0.93

.

Requirement 3

	Material	Conversion	Total
Ending Inventory	$ 31,350	$ 15,345	$ 46,695

Requirement 4

	Material	Conversion	Total
Units Completed and transferred	$ 155,040	$ 252,960	$ 408,000

.

Working

Reconciliation of Units
A	Opening WIP	75,000
B	Introduced	252,000
C=A+B	TOTAL	327,000
D	Transferred	272,000
E=C-D	Closing WIP	55,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	272,000			100%	272,000.0	100%	272,000
Closing WIP	55,000			100%	55,000.0	30%	16,500
Total	327,000			Total	327,000.0	Total	288,500

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 59,400	$ 17,400	$ 76,800
Cost incurred during period		$ 126,990	$ 250,905	$ 377,895
Total Cost to be accounted for		$ 186,390	$ 268,305	$ 454,695
Total Equivalent Units		327,000	288,500
Cost per Equivalent Units		$                   0.57	$                     0.93

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.57	55,000	$          31,350.00	272,000	$ 155,040
Conversion cost	$ 0.93	16,500	$          15,345.00	272,000	$     252,960.00
TOTAL	$ 454,695	TOTAL	$ 46,695	TOTAL	$ 408,000