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 1 307,000 Completed and transferred to the Mixing Department Materials 709, 250 Conversion 280, 600 Inventory, May 31 The May 1 work in process inventory consisted of 100,000 pounds with $219,000 in materials cost and $88,000 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, 295,000 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

Answer 1

Answer :

(1) Computation of Equivalent unit of production

	Material	Conversion
	Unit	% Compelte	Equivalent unit	Unit	% Compelte	Equivalent unit
Units transferred out	307000	100 %	307000	307000	100 %	307000
Ending WIP Inventory	88000	100 %	88000	88000	70%	61600
Equivalent unit of production			395000			368600

Working note -1

Units transferred out = Beginning WIP + Units added - Ending  WIP

= 100000 + 295000 - 88000

= 307000

(2) Computation of cost per Equivalent unit

	Material	Conversion
Beginning WIP cost	$ 219000	$ 88000
cost incurred during the period	$ 709250	$ 280600
Total cost	$ 928250	$ 368600
Equivalent unit of production	395000	368600
cost per Equivalent unit	$ 2.35	$ 1

(3 ) Computation of Cost of Ending WIP

	Material	Conversion	Total for may
Ending WIP inventory( Equivalent )	88000	61600
cost per Equivalent unit	$ 2.35	$ 1
Cost of Ending WIP	$ 206800	$ 61600	$ 268400

(4) Computation of Cost of units transferred out

	Material	Conversion	Total for may
units transferred out	307000	307000
cost per Equivalent unit	$ 2.35	$ 1
Cost of units transferred out	$ 721450	$ 307000	$ 1028450