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	63,000	100	%		50	%
Work in process inventory, May 31	43,000	100	%		30	%
Materials cost in work in process inventory, May 1				$	51,800
Conversion cost in work in process inventory, May 1				$	14,700
Units started into production					247,200
Units transferred to the next production department					267,200
Materials cost added during May				$	87,790
Conversion cost added during May				$	212,181

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
	Equivalent units of production	310200	280100
2		Materials	Conversion
	Cost per equivalent unit	$               0.45	$               0.81
3		Materials	Conversion	Total
	Cost of ending work in process inventory	$           19,350	$           10,449	$           29,799
4		Materials	Conversion	Total
	Cost of units completed and transferred out	$       120,240	$       216,432	$       336,672

Working:

1.

		Equivalent Units
	Physical Units	Material		Conversion
Units completed and transferred out	267200	100%	267200	100%	267200
Units in Work in process, May 31	43000	100%	43000	30%	12900
Total Units accounted for	310200		310200		280100

2.

	Material	Conversion	Total
Work in process, May 1	51800	14700	66500
Costs added during the month	87790	212181	299971
Total costs to be accounted for $	139590	226881	366471
Total equivalent units accounted for	310200	280100
Cost per equivalent unit $	0.45	0.81	1.26

3.

	Material	Conversion	Total
Equivalent units	43000	12900
Cost per Equivalent unit	0.45	0.81
Cost of ending work in process inventory $	19350	10449	29799

4.

	Material	Conversion	Total
Equivalent units	267200	267200
Cost per Equivalent unit	0.45	0.81
Cost of units completed and transferred out $	120240	216432	336672

Answer 2

Equivalent units of production = units transferred or completed + Equivalent # (ending WIP)