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	281,600	Completed and transferred to the Mixing Department	?
Materials	680,600
Conversion	503,280
Inventory, May 31	?

The May 1 work in process inventory consisted of 80,000 pounds with $155,200 in materials cost and $126,400 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, 318,000 pounds were started into production. The May 31 inventory consisted of 92,000 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. Compute the Grinding Department's equivalent units of production for materials and conversion in May.

	Physical unit	%	EUP-Material	%	EUP-Conversion cost
Units transferred out	306000	100%	306000	100%	306000
Ending work in process	92000	100%	92000	70%	64400
Total	398000		398000		370400

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

	Material	Conversion cost
Beginning wip	155200	126400
Cost added during period	680600	503280
Total cost	835800	629680
Equivalent unit of production	398000	370400
Cost per equivalent unit	2.10	1.70

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

	Material	Conversion cost	Total
Ending work in process	193200	92000*70%*1.7=109480	302680

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

	Material	Conversion	Total
cost of units transferred out	306000*2.1=642600	306000*1.7=520200	1162800