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 

		Completed and transferred
Inventory, May 1	21,800	to the Mixing Department
Materials	133,400
Conversion	225,500
Inventory, May 1	?

The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 167,000 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

Work-in-process inventory, 5/1	18000
Units started	167000
Total units accounted for	185000

Units completed and transferred	170000
Work-in-process inventory, 5/31	15000
Total units accounted for	185000

Part 1

	Direct materials	Conversion
Equivalent units of production	185000	179000

	Physical units	Direct materials	Conversion
Units completed and transferred	170000	170000	170000
Work-in-process inventory, 5/31 (15000*60%)	15000	15000	9000
Equivalent units of production	185000	185000	179000

Part 2

	Direct materials	Conversion
Equivalent cost per unit	$0.80	$1.30

Cost to account for	Direct materials	Conversion
Cost of Work-in-process inventory, 5/1	14600	7200
Cost added during the month	133400	225500
Total cost	148000	232700
Equivalent units of production	185000	179000
Equivalent cost per unit (total cost / equivalent unit)	$0.80	$1.30

Part 3

	Direct materials	Conversion	Total
Costing Ending working in process
(15000*0.80)	12000
(9000*1.30)		11700
			$23700

Part 4

	Direct materials	Conversion	Total
Cost of units transferred
(170000*0.80)	136000
(170000*1.30)		221000
			$357000