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	188,670	Completed and transferred to the Mixing Department	?
Materials	625,400
Conversion	353,320
Inventory, May 31	?

The May 1 work in process inventory consisted of 57,000 pounds with $114,570 in materials cost and $74,100 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, 284,000 pounds were started into production. The May 31 inventory consisted of 100,000 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 units of production:-
	Materials	Conversion
Transferred to next department (note -1)	241,000	241,000
Equivalent units in ending work in process:
Materials: 1,00,000 units ×100% complete	1,00,000
Conversion:1,00,000 units ×60% complete		60,000
Equivalent units of production	341,000	301,000

Note-1) units transfered to next department = units in beginning work in process + units started into production - units in ending work in process = 57,000 + 284,000 - 1,00,000 = 241,000

2)

Cost per equivalent unit:-
	Materials	Conversions
Cost of beginning work in process	$114,570	$74,100
Cost added during the period	$625,400	$353,320
Total cost (a)	$739,970	$427,420
Equivalent units of production (b)	341,000	301,000
Cost per equivalent units (a) ÷(b)	$2.17	$1.42

3)

Cost of ending work in process:-
	Materials	Conversion	Total
Ending work in process inventory:
Equivalent units	1,00,000	60,000
Cost per equivalent unit	$2.17	$1.42
Cost of ending work in process inventory	$217,000	$85,200	$302,200

4)

Cost of units transfered out::-
	Materials	Conversion	Total
Units transfered to next department	241,000	241,000
Cost per equivalent units	$2.17	$1.42
Cost of units completed and transfered out	$522,970	$342,220	$865,190