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: Units 5,000 10,000 Work in process inventory, May 1 Work in process inventory, May 31 Materials cost in work in process inventory, May 1 Conversion cost in work in process inventory, May 1 Units started into production Units transferred to the next production department Materials cost added during May Conversion cost added during May Percent Complete Materials Conversion 100 % 40 % 100 % 30 % $ 1,500 $ 4,000 180,000 175,000 $ 54,000 $ 352,000 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

Solution

	Material	Conversion
Equivalent Units of Production	185,000	178,000

.

	Material	Conversion
Cost per equivalent Unit	$                    0.30	$                   2.00

.

	Material	Conversion	Total
Ending Inventory	$ 3,000	$ 6,000	$ 9,000

.

	Material	Conversion	Total
Units Completed and transferred	$ 52,500	$ 350,000	$ 402,500

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	175,000			100%	175,000	100%	175,000
Ending WIP	10,000			100%	10,000	30%	3,000
Total	185,000			Total	185,000	Total	178,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 1,500	$ 4,000	$ 5,500
Cost incurred during period		$ 54,000	$ 352,000	$ 406,000
Total Cost to be accounted for		$ 55,500	$ 356,000	$ 411,500
Total Equivalent Units		185,000	178,000
Cost per Equivalent Units		$                   0.30	$                     2.00	$                2.30

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.30	10,000	$             3,000.00	175,000	$          52,500.00
Conversion cost	$ 2.00	3,000	$             6,000.00	175,000	$        350,000.00
TOTAL	$ 411,500	TOTAL	$ 9,000	TOTAL	$ 402,500