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	93,100	Completed and transferred to the Mixing Department	?
Materials	664,940
Conversion	471,216
Inventory, May 31	?

The May 1 work in process inventory consisted of 35,000 pounds with $51,100 in materials cost and $42,000 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, 407,000 pounds were started into production. The May 31 inventory consisted of 133,000 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

	Units	Amount		Units	Amount
Opening WIP	35000	93100	Transferred to Mixing Dept.	309000
Materials	407000	664940	Closing WIP	133000
Conversion		471216
	442000			442000
Computation of Equivalent units	=Units transferred out + (Units in ending inventory × Percentage of completion)
	Materials	Conversion
Units Transferred	309000	309000
Closing WIP
133,000*100%	133000
133,000*60%		79800
Equivalent Units of Production	442000	388800
Computation of Cost per Equivalent Unit
	Materials	Conversion	Total
Opening Cost	51100	42000	93100
Added during May	664940	471216	1136156
Total cost to be accounted for	716040	513216	1229256
/Total Equivalent Units	442000	388800
Cost per Equivalent unit	1.62	1.32	2.94
Computation of Cost of Units Transferred out
=Units Transferred out*Cost per Equivalent unit
=309000*$2.94
908460
Computation of Cost of Ending WIP
	Materials	Conversion	Total
Closing WIP Equivalent Units	133000	79800
Cost per Equivalent unit	1.62	1.32
Total Cost of Ending WIP	215460	105336	320796
Verification:
Cost of Closing WIP = Total cost to be accounted for - Cost of units transferred out
320796	=1229256-908460
320796	320796