Question

In: Accounting

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking....

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 1 309,880 Completed and transferred
to the Mixing Department
?
Materials 580,000
Conversion 375,371
Inventory, May 31 ?

The May 1 work in process inventory consisted of 127,000 pounds with $181,610 in materials cost and $128,270 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, 352,000 pounds were started into production. The May 31 inventory consisted of 111,000 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.

Solutions

Expert Solution

Work in Process, Beginning 127000
Add: Pounds started during May 352000
Less: Ending inventory -111000
Units completed and transferred out 368000
1
Materials Conversion
Units completed and transferred out 368000 368000
Work in process, ending:
110000 X 100% 111000
110000 X 70% 77700
Equivalent units of production 479000 445700
2
Materials Conversion
Work in process, May 1 181610 128270
Cost added during May 580000 375371
Total costs 761610 503641
Divide by Equivalent units of production 479000 445700
Cost per Equivalent unit 1.59 1.13
3
Materials Conversion Total
Work in process, ending units 111000 77700
X Cost per Equivalent unit 1.59 1.13
Cost of ending work in process inventory 176490 87801 264291
4
Materials Conversion Total
Units completed and transferred out 368000 368000
X Cost per Equivalent unit 1.59 1.13
Cost of Units completed and transferred out 585120 415840 1000960

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