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	60,000	100	%		50	%
Work in process inventory, May 31	40,000	100	%		30	%
Materials cost in work in process inventory, May 1				$	50,200
Conversion cost in work in process inventory, May 1				$	13,900
Units started into production					246,000
Units transferred to the next production department					266,000
Materials cost added during May				$	78,320
Conversion cost added during May				$	200,160

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

	Whole unit	%	EUP-material	%	EUP-conversion
Unit completed and transferred out	266000	100%	266000	100%	266000
Ending work in process	40000	100%	40000	30%	12000
Total	306000		306000		278000

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

	Material	Conversion
Beginning work in process	50200	13900
Cost added during period	78320	200160
Total cost	128520	214060
Equivalent unit	306000	278000
Cost per equivalent unit	0.42	0.77

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

	Material	Conversion	Total
Cost of ending work in process	40000*.42 = 16800	12000*.77 = 9240	26040

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	Total
Cost of units transferred to next production	266000*.42 = 111720	266000*.77 = 204820	316540