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	374,660	Completed and transferred to the Mixing Department	?
Materials	585,210
Conversion	375,114
Inventory, May 31	?

The May 1 work in process inventory consisted of 131,000 pounds with $221,390 in materials cost and $153,270 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, 305,000 pounds were started into production. The May 31 inventory consisted of 88,000 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.

Answer 1

1.)	Equivalent units
		Materials	Conversion
	Completed & Transferred out	348,000	348,000
	(131,000 + 305,000 - 88,000 )
	Ending Work in process- 88,000	88,000	61,600
	( Materials 100%, Conversion 70%)
	Equivalent units of Production	436,000	409,600
2.)	Cost per equivalent unit
		Materials	Conversion
	Opening Cost	221,390	153,270
	Add: During the period	585,210	375,144
	Total Costs $	806,600	528,414
	/ Equivalent units of production	436,000	409,600
	Cost per equivalent unit $	1.85	1.290073
3.)	Cost of ending work in process:
		Amount in $
	Materials ( 88,000 x 1.85 )	162,800
	Conversion ( 61,600 x 1.290073 )	79,468
	Total for May	242,268
4.)	Cost of units transferred out
		Amount in $
	Materials ( 348,000 x 1.85 )	643,800
	Conversion (348,000 x 1.290073 )	448,945
	Total for May	1,092,745