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	52,000	100	%		40	%
Work in process inventory, May 31	32,000	100	%		25	%
Materials cost in work in process inventory, May 1				$	45,500
Conversion cost in work in process inventory, May 1				$	12,100
Units started into production					246,000
Units transferred to the next production department					266,000
Materials cost added during May				$	55,820
Conversion cost added during May				$	174,220

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) Equivalent unit

	Material	Conversion
Unit transferred out	266000	266000
Ending WIP	32000	32000*25% = 8000
Total	298000	274000

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	45500	12100
Cost added	55820	174220
Total Cost	101320	186320
Equivalent unit	298000	274000
Cost per equivalent unit	0.34	0.68

3) Cost of ending WIP

	Material	Conversion	Total
Cost of ending WIP	32000*.34 = 10880	8000*.68 = 5440	16320

4) Cost of Unit transferred out

	Material	Conversion	Total
Cost of Unit transferred out	266000*.34 = 90440	180880	271320

5) Cost reconciliation

Cost to be accounted for
Beginning WIP	57600
Cost added	230040
Total cost to be accounted for	287640
Cost accounted as
Cost of unit transferred out	271320
Ending WIP	16320
Total cost accounted for	287640