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	353,850	Completed and transferred to the Mixing Department	?
Materials	838,050
Conversion	445,760
Inventory, May 31	?

The May 1 work in process inventory consisted of 105,000 pounds with $219,450 in materials cost and $134,400 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, 365,000 pounds were started into production. The May 31 inventory consisted of 139,000 pounds that were 100% complete with respect to materials and 60% 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

Units completed and transferred= Work in process, May 1+Units started during May-Work in process, May 31

= 105000+365000-139000= 331000 pounds

1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.

	Materials	Conversion costs
Units completed and transferred	331000	331000
Work in process, May 31	(139000*100%)= 139000	(139000*60%)= 83400
Equivalent units	470000	414400

2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.

	Materials	Conversion costs
Cost of beginning work in process	$219450	$134400
Cost added during May	838050	445760
Total costs	$1057500	$580160
Equivalent units	470000	414400
Cost per equivalent unit	$2.25	$1.40

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

	Materials	Conversion costs	Total
Cost per equivalent units	$2.25	$1.40
Ending equivalent units	139000	83400
Total cost of ending work in process	$312750	$116760	$429510

4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

	Materials	Conversion costs	Total
Cost per equivalent units	$2.25	$1.40
Units completed and transferred	331000	331000
Total cost of ending work in process	$744750	$463400	$1208150