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 88,000 Completed and transferred
to the Mixing Department
?
Materials 585,690
Conversion 204,050
Inventory, May 31 ?

The May 1 work in process inventory consisted of 44,000 pounds with $64,680 in materials cost and $23,320 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, 355,000 pounds were started into production. The May 31 inventory consisted of 123,000 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.

Solutions

Expert Solution

1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.

Physical unit % Material % Conversion
Units completed and transferred out 276000 100% 276000 100% 276000
Ending work in process 123000 100% 123000 60% 73800
Total equivalent unit 399000 349800

2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.

Material conversion cost
Beginning work in process 64680 23320
Cost added during production 585690 204050
Total cost 650370 227370
equivalent unit 399000 349800
Cost per equivalent unit 1.63 0.65

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

Ending work in process
Material (123000*1.63) 200490
Conversion cost (73800*.65) 47970
Total cost of ending work in process 248460

4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

Units completed and transferred out
Material (276000*1.63) 449880
Conversion cost (276000*.65) 179400
Total cost of units completed and transferred out 629280

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