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	74,000	100	%		30	%
Work in process inventory, May 31	54,000	100	%		20	%
Materials cost in work in process inventory, May 1				$	58,800
Conversion cost in work in process inventory, May 1				$	17,500
Units started into production					262,400
Units transferred to the next production department					282,400
Materials cost added during May				$	143,040
Conversion cost added during May				$	252,244

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 EQUIVALENT UNIT :

	Physical unit	%	Material	%	conversion cost
Unit Transferred out	282,400	100%	282,400	100%	282,400
Ending work in process	54,000	100%	54,000	20%	10,800
Equivalent unit			336,400		293,200

2) CALCULATE COST PER EQUIVALENT UNIT :

	MATERIAL	CONVERSION COST
Beginning work in process	58,800	17,500
Cost during the period	143,040	252,244
Total cost (a)	201,840	269,744
Equivalent unit (b)	336,400	293,200
Cost per equivalent unit (a/b)	0.60	0.92

3) CALCULATE ENDING WORK IN PROCESS :

	MATERIAL	CONVERSION COST	TOTAL
Ending work in process	54,000*100%*0.60 = 32,400	54,000*20%*0.92 = 9,936	42,336

4) CALCULATE UNIT TRANSFERRED OUT :

	MATERIAL	CONVERSION COST	TOTAL
Unit Transferred out	282400*0.60=169,440	282400*0.92=259,808	429,248

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