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 1 140,400 Completed and transferred to the Mixing Department ? Materials 587,200 Conversion 210,240 Inventory, May 31 ? The May 1 work in process inventory consisted of 60,000 pounds with $104,400 in materials cost and $36,000 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, 304,000 pounds were started into production. The May 31 inventory consisted of 55,000 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.

Answer 1

1)

Equivalent unit of production:-
	Materials	conversion
Transfered to next department (see note)	309,000	309,000
Equivalent unit in ending work in process:
Materials: (55,000 × 100%)	55,000
Conversion: (55,000 ×60%)		33,000
Equivalent units of production	364,000	342,000

Note:- unit transfered to next department = unit in beginning work in process + units started into production- units in ending work in process

Unit transfered to next department = 60,000 + 304,000 - 55,000

Unit transfered to next department = 309,000

2)

Cost per equivalent unit:-
	Materials	conversion
Cost of beginning work in process	$104,400	$36,000
Cost added during the period	$587,200	$210,240
Total cost (a)	$691,600	$246,240
Equivalent units of production (b)	364,000	342,000
Cost per equivalent unit (a) ÷ (b)	$1.9	$0.72

3)

Cost of ending work in process inventory:-
	Materials	conversion	Total
Ending work in process inventory:
Equivalent units (a)	55,000	33,000
Cost per equivalent unit (b)	$1.9	$0.72
Cost of ending work in process inventory (a) × (b)	$104,500	$23,760	$128,260

4)

Cost of unit transfered out:-
	Materials	conversion	Total
Unit completed and transfered out:-
Unit transfered to next department (a)	309,000	309,000
Cost per equivalent unit (b)	$1.9	$0.72
Cost of unit completed and transfered out (a) × (b)	$587,100	$222,480	$809,580