Question

Helix Corporation uses the weighted-average method in its process costing system. It produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow:

		Percent Complete
	Units	Materials			Conversion
Work in process inventory, May 1	77,000	100	%		30	%
Work in process inventory, May 31	57,000	100	%		20	%
Materials cost in work in process inventory, May 1				$	60,600
Conversion cost in work in process inventory, May 1				$	18,200
Units started into production					264,200
Units transferred to the next production department					284,200
Materials cost added during May				$	127,060
Conversion cost added during May				$	262,620

Required:

1. Calculate the first production department's equivalent units of production for materials and conversion for May.

2. Compute the first production department's cost per equivalent unit for materials and conversion for May.

3. Compute the first production department's cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May.

Answer 1

1. Equivalent units for Material and Conversion cost Equivalent Unit Conversion Physical units Material Units to be accounted for:- Units Completed & transferred out Ending work in Process Total Units 284200 57000 341200 284200 57000 341200 284200 11400 295600 Ending WIP = Units in ending WIP X Percentage complete 57000 x 100% 57000 x 20% 2. Cost Per Equivalent Unit Material Conversion Total cost Cost to be accounted For:- Beginning work in process Cost added during month Total Cost (A) 60,600 $ 127,060 $ 187,660 $ 18,200 $ 262,620 $ 280,820 $ 78,800 389,680 468,480 (B) Equivalent Units Cost per unit 341200 0.55 295600 0.95 $ (A)/(B) $ 1.50 3. cost of Ending work in Process L T Ending work in process: Material Conversion Total Cost of Ending Work in Process $ $ 31,350 10,830 (57000 units x $ 0.55) (11400 units x $0.95) 42,180 4.Cost of goods Transferred out $ Units Completed & Transferred out:- Material Conversion Total Cost of units completed & Transferred out 156,310 269,990 (284200 units x $ 0.55) (284200 units x $ 0.95) 426,300