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	491,780	Completed and transferred to the Mixing Department	?
Materials	859,040
Conversion	535,175
Inventory, May 31	?

The May 1 work in process inventory consisted of 134,000 pounds with $300,160 in materials cost and $191,620 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, 349,000 pounds were started into production. The May 31 inventory consisted of 47,000 pounds that were 100% complete with respect to materials and 70% 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 unit

	EUP-Material	EUP-Conversion
Unit transferred out	436000	436000
Ending WIP	47000	47000*70% = 32900
Total	483000	468900

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	300160	191620
Cost added	859040	535175
Total cost	1159200	726795
Equivalent unit	483000	468900
Cost per EUP	2.40	1.55

3) Cost of ending WIP

	Material	Conversion	Total
Cost of ending WIP	47000*2.40 = 112800	32900*1.55 = 50995	163795

4) Cost of unit transferred out

	Material	Conversion	Total
Cost of unit transferred out	436000*2.40 = 1046400	675800	1722200