Question

Question 1: 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: Inventory, May 1 Work in Process Grinding Department 174,240 Completed and transferred to the Mixing Department 407,520 124,160 Materials Conversion Inventory, May 31 The May I work in process inventory consisted of 132,000 pounds with S137,280 in materials cost and S36,960 in conversion cost. The May I work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 322,000 pounds were started into production. The May 31 inventory consisted of 128,000 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. Question 1: Builder Products, Inc., uses the weighted average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 90,000 Pounds started into production during May 550,000 Pounds completed and transferred out Pounds in process, May 31; materials 70% complete; conversion 30% complete 50,000 Cost data: Work in process inventory, May 1: Materials cost $152,300

Answer 1

Solution: 1. Equivalent units of production - weighted average Units completed and transferred out=132000+322000-128000 Units of ending goods in process Equivalent units of production Units % Materials EUP- Materials % conversion EUP- conversion a ba*b Ca*c 326,000 100% 326,000 100% 326,000 128,000 100% 128.000 60% 76.800 454,000 454,000 402,800 2.Cost per equivalent unit of production Cost of beginning goods in process Costs incurred this period Total costs + Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Materials 137280 407520 544800 Costs 454,000 EUP 1.20 Costs EUP conversion 36,960 124,160 161120 402,800 0.40 3. Costs of ending goods in process Direct materials conversion Total cost of ending goods in process Cost per E EUP UP 128,000 1.20 76,800 0.40 Total cost 153,600 30,720 184,320 4.Cost of units transferred to mixing dept: EUP Cost per Total cost EUP Direct materials conversion Total costs transferred out 326,000 326,000 1.20 0.40 391,200 130.400 521,600
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Q2 1.Equivalent units of production - weighted average Units % Material Units completed and transferred out=90000+550000-50000 Units of ending goods in process Equivalent units of production 590,000 50,000 100% 70% EUP- Material % conversion (EUP- conversion ab |atc 590,000 100% 590,000 35.000 30% 15,000 625,000 605,000 2.Cost per equivalent unit of production Cost of beginning goods in process Costs incurred this period Total costs Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Material 152300 791450 943750 Costs 625,000 EUP 1.51 conversion 63,300 348.100 411400 605,000 0.68 Costs EUP 3.Costs of ending goods in process Material conversion Total cost of ending goods in process EUP Cost per EUP Total cost 35,000 1.51 52,850 15,000 0.68 10,200 63,050 4.Cost of units transferred out: EUP Cost per EUP Total cost Material conversion Total costs transferred out 590,000 590,000 1.51 0.68 890,900 4 01,200 1,292,100 5) cost reconciliation cost to be accounted for : Costs in beginning work in process (152300+63 300) Costs added during the period (791450+348100) total cost to be accounted for Costs accounted for: Goods transferred out Ending work in process total Costs accounted for: 215,600 1,139,550 1355150 1,292,100 63,050 1,355,150