Question

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:

Work in Process—Grinding Department
Inventory, May 1	374,660	Completed and transferred to the Mixing Department	?
Materials	585,210
Conversion	375,114
Inventory, May 31	?

The May 1 work in process inventory consisted of 131,000 pounds with $221,390 in materials cost and $153,270 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 305,000 pounds were started into production. The May 31 inventory consisted of 88,000 pounds that were 100% complete with respect to materials and 70% 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.

1.Compute the Grinding Department's equivalent units of production for materials and conversion in May.

	Materials Conversion Equivalent units of production

2.Compute the Grinding Department's costs per equivalent unit for materials and conversion for May. (Round your answers to 2 decimal places.)

	Materials Conversion Cost per equivalent unit

3.Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May. (Round your intermediate calculations to 2 decimal places.)

	Materials Conversion Total Cost of ending work in process inventory

4.Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May. (Round your intermediate calculations to 2 decimal places.)

	Materials Conversion Total Cost of units completed and transferred out

Answer 1

Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor + Overheads. So, ending working Physical units of production: Units in beginning inventory Add: Units started during current period Less: Units in ending inventory Units completed and transferred out 131,000 305,000 -88,000 348,000 Particulars Whole Units 348,000 88,000 436,000 Completed and transferred Ending work in process Equivalent Units of Production (EUP) % EUP- Materials | Materials 100% 348,000 100% 88,000 436,000 % Conversion 100% 70% EUP- Conversion 348,000 [348000 units x 100%; 348000 units x 100%] 61,600 ][88000 units x 100%; 88000 units x 70%] 409,600 Cost per equivalent units of production Cost of beginning work in process Cost added during the period Total Costs Divided by Equivalent units of Production (EUP) Cost per Equivalent units of Production Materials $221,390 $585,210 $806,600 436,000 $1.85 Conversion $153,270 $375,114 $528,384 409,600 [As computed EUP schedule presented above] $1.29 [$806600 / 436000 units = $1.85; $528384 / 409600 units = $1.29]

3) Cost of ending work in process EUP Cost per EUP $1.85 $1.29 Materials Conversion Total Cost of ending work in process 88,000 61,600 Totals $162,800 [88000 units x $1.85] $79,464 [61600 units x $1.29] $242,264 4) Cost of goods completed & transferred EUP Totals Cost per EUP $1.85 $1.29 Materials Conversion Total Cost of goods completed & transferred out 348,000 348,000 $643,800 [348000 units x $1.85] $448,920 [348000 units x $1.29] $1,092,720