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	70,000	100	%		40	%
Work in process inventory, May 31	50,000	100	%		25	%
Materials cost in work in process inventory, May 1				$	56,100
Conversion cost in work in process inventory, May 1				$	16,400
Units started into production					255,000
Units transferred to the next production department					275,000
Materials cost added during May				$	112,900
Conversion cost added during May				$	236,600

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)

Materials Conversion 275,000 275,000 Particulars Units transferred to next production department Add: Equivalent units in ending Work in Progress Inventory - Materials (50,000 * 100 %) - Conversion (50,000 * 25 %) 50,000 COZ) 12,500 Equivalent Units of Production 325,000 287,500

2)

Particulars Cost of beginning Work in Progress Add: Cost added during the period Materials $56,100 $112,900 Conversion $16,400 $236,600 Total Cost (A) | $169,000 $253,000 Equivalent No. Of Units (B) 325,000 287,500 Cost per Equivalent Unit {(A)/(B)} $0.52 $0.88

3)

Particulars Units of Ending Work in Progress Inventory (From Cost per Equivalent Unit(From (ii)) Materials Conversion 50,000 12,500 $0.52 $0.88 Cost of Ending Work in Progress Inventory $26,000 $11,000 Total cost (Material + Conversion) $37,000

4)

Particulars Materials Conversion Units Completed & transferred to next department 275,000 275,000 Cost per Equivalent Unit(From (ii)) $0.52 $0.88 Cost of Units completed & transferred $143,000 $242,000 Total cost (Material + Conversion) $385,000