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	188,670	Completed and transferred to the Mixing Department	?
Materials	625,400
Conversion	353,320
Inventory, May 31	?

The May 1 work in process inventory consisted of 57,000 pounds with $114,570 in materials cost and $74,100 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, 284,000 pounds were started into production. The May 31 inventory consisted of 100,000 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

• [1]

	Material	Conversion
Equivalent units of production	341,000	301,000

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	241,000	100%	241,000	100%	241,000
Units of ENDING WIP	100,000	100%	100,000	60%	60,000
Equivalent Units of Production			341,000		301,000

• [2]

	Material	Conversion
Cost per Equivalent units	$                         2.17	$                              1.42

COST per EUP			Material		Conversion
Cost of Beginning WIP			$        114,570.00		$                                  74,100.00
Cost incurred during the period			$        625,400.00		$                                353,320.00
Total Costs		Costs	$        739,970.00	Costs	$                                427,420.00
Equivalent units of production		EUP	341,000	EUP	301,000
Cost per EUP			$              2.17000		$                                      1.42000

• [3]

	Material	Conversion	Total
Cost of ending WIP Inventory	$            217,000.00	$                    85,200.00	$                     302,200.00

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	100,000	$                      2.17	$        217,000.00
- Conversion	60,000	$                      1.42	$          85,200.00
Total cost of ending WIP				$            302,200.00

• [4]

	Material	Conversion	Total
Cost of units completed & transferred out	$            522,970.00	$                 342,220.00	$                     865,190.00

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	241,000	$                      2.17	$        522,970.00
- Conversion	241,000	$                      1.42	$        342,220.00
Total Cost transferred Out				$            865,190.00