Weighted-Average Method South Atlantic Pulp Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. This is the company’s production schedule for May:
| Tons of Pulp | Percent Completed | |
Materials | Conversion | ||
Work-in-process inventory, May 1 | 6,000 | 100% | 50% |
Started during May | 15,000 |
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|
Units to account for | 21,000 |
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|
Units from beginning work-in-process, |
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|
|
which were completed and |
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|
|
transferred out during May | 6000 |
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|
Started and completed during May | 12,000 |
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|
Work-in-process inventory, May 31 | 3,000 | 100% | 50% |
Total units accounted for | 21,000 |
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|
The following cost data are available:
Work-in-process inventory, May 1 | |
Direct materials | $ 88,000 |
Conversion | 126,000 |
Costs incurred during May | |
Direct materials | 220,000 |
Conversion | 356,000 |
Required
1. Calculate equivalent units of direct materials and conversion during May. Use the weighted-average method.
2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the weighted-average method.
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