Question

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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: 2 Work in Process-Grinding Department Inventory, May 1 310,070 Completed and transferred to the Mixing Department Materials 570,560 Conversion 363,662 Inventory, May 31 ? The May 1 work in process inventory consisted of 101,000 pounds with $183,820 in materials cost and $126,250 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, 280,000 pounds were started into production. The May 31 inventory consisted of 78,000 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

1.

Units completed:

= 101,000 + 280,000 - 78,000

= 303,000

Equivalent units = Units completed + (Ending inventory X percentage completed)

Material:

= 303,000 + (78,000 X 100%)

= 381,000

Conversion:

= 303,000 + (78,000 X 70%)

= 357,600

2.

Cost per equivalent unit:

Material:

= ($183,820 + $570,560) / 381,000

= $1.98

Conversion:

= ($126,250 + $363,662) / 357,600

= $1.37

3.

Cost of ending work in process inventory:

Material:

= 78,000 X $1.98

= $154,440

Conversion:

= 78,000 X 70% X $1.37

= $74,802

Total

= $154,440 + $74,802

= $229,242

4.

Cost of units completed and transferred out:

Material:

= 303,000 X $1.98

= $599,940

Conversion:

= 303,000 X $1.37

= $415,110

Total:

= $599,940 + $415,110

= $1,015,050