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:

Units	Units Materials			Conversion
Work in process inventory, May 1	65,000	100	%		30	%
Work in process inventory, May 31	45,000	100	%		20	%
Materials cost in work in process inventory, May 1				$	53,300
Conversion cost in work in process inventory, May 1				$	15,400
Units started into production					257,000
Units transferred to the next production department					277,000
Materials cost added during May				$	98,040
Conversion cost added during May				$	221,980

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

Solution

	Material	Conversion
Equivalent Units of Production	3,22,000	2,86,000

.

	Material	Conversion
Cost per equivalent Unit	$                    0.47	$                   0.83

.

	Material	Conversion	Total
Ending Inventory	$ 21,150	$ 7,470	$ 28,620

.

	Material	Conversion	Total
Units Completed and transferred	$ 130,190	$ 229,910	$ 360,100

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	2,77,000			100%	2,77,000	100%	2,77,000
Closing WIP	45,000			100%	45,000	20%	9,000
Total	3,22,000			Total	3,22,000	Total	2,86,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 53,300	$ 15,400	$ 68,700
Cost incurred during period		$ 98,040	$ 221,980	$ 320,020
Total Cost to be accounted for		$ 151,340	$ 237,380	$ 388,720
Total Equivalent Units		3,22,000	2,86,000
Cost per Equivalent Units		$                   0.47	$                     0.83	$                1.30

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.47	45,000	$          21,150.00	2,77,000	$ 130,190
Conversion cost	$ 0.83	9,000	$             7,470.00	2,77,000	$      2,29,910.00
TOTAL	$ 388,720	TOTAL	$ 28,620	TOTAL	$ 360,100