Question

Highlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below: Percent Completed Labor and Tons of Pulp Materials Overhead 20,000 90 % 80% 30,000 60% 40% 190,000 Work in process, June 1 Work in process, June 30 Started into production during June Required: 1. Compute the number of tons of pulp completed and transferred out during June. 2. Compute the equivalent units of production for materials and for labor and overhead for June.

Answer 1

Requirement 1

Units transferred = 180,000 Units

Requirement 2

	Material	Conversion
Equivalent Units of Production	198,000	192,000

Working

Reconciliation of Units
A	Beginning WIP	20,000
B	Introduced	190,000
C=A+B	TOTAL	210,000
D	Transferred out	180,000
E=C-D	Ending WIP	30,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	180,000			100%	180,000	100%	180,000
Ending WIP	30,000			60%	18,000	40%	12,000
Total	210,000			Total	198,000	Total	192,000