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:

The May 1 work-in-process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 167000 pounds were started into production. The May 31 inventory consisted of 15.000 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

Weighted-Average Method:-

1.	Equivalent units of production
		Materials	Conversion
	Transferred to next department*..............................................	170,000	170,000
	Equivalent units in ending work in process:
	Materials: 15,000 units x 100% complete.............................	15,000
	Conversion: 15,000 units x 60% complete............................		9,000
	Equivalent units of production................................................	185,000	179,000

      *Units transferred to the next department = Units in beginning work in process + Units started into production − Units in ending work in process = 18,000 + 167,000 − 15,000 = 170,000

2.	Cost per equivalent unit
		Materials	Conversion
	Cost of beginning work in process......................................	$  14,600	$   7,200
	Cost added during the period.............................................	133,400	225,500
	Total cost (a)........................................................................	$148,000	$232,700
	Equivalent units of production (b)......................................	185,000	179,000
	Cost per equivalent unit (a) ÷ (b)........................................	$0.80	$1.30

3. and 4.

	Cost of ending work in process inventory and units transferred out
		Materials	Conversion	Total
	Ending work in process inventory:
	Equivalent units.......................................	15,000	9,000
	Cost per equivalent unit...........................	$0.80	$1.30
	Cost of ending work in process inventory..............................................................	$12,000	$11,700	$23,700
	Units completed and transferred out:
	Units transferred to the next department	170,000	170,000
	Cost per equivalent unit...........................	$0.80	$1.30
	Cost of units completed and transferred out.........................................................	$136,000	$221,000	$357,000