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: Inventory, May 1 Materials Conversion Inventory, May 31 Work in Process-Grinding Department 273,600 Completed and transferred to the Mixing Department 522,800 343, 104 The May 1 work in process inventory consisted of 95,000 pounds with $155,890 in materials cost and $117,800 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, 282,000 pounds were started into production. The May 31 inventory consisted of 127,000 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

Requirement (1) Computation of Equivalent Units of Production

Statement of Equivalent Units of Production
	Physical Units	Materials	Conversion
		%	Units	%	Units
Units accounted for:
Completed and transferred out	250,000	100%	250,000	100%	250,000
Ending WIP Inventory	127,000	100%	127,000	70%	88,900
TOTAL Units Accounted for	377,000		377,000		338,900

Units completed and transferred out = [Units in beginning WIP + Units started into production − Units in ending WIP]

= 95,000 + 282,000 - 127,000

= 250,000 units

Requirement (2) Computation of Cost Per Equivalent Unit

Statement of Cost per equivalent unit
	Material	Conversion	Total
Opening WIP	155,800	117,800	273,600
Current period cost	522,800	343,104	865,904
Total Cost (A)	$ 678,600	$ 460,904	$ 1,139,504
Equivalent Units (B)	377,000	338,900
Cost Per Equivalent Unit	$ 1.80	$ 1.36	$ 3.16

Requirement (3) Computation of Cost of Ending WIP

	Materials	Conversion	Total
Ending WIP Units (A)	127,000	88,900
Cost per Equivalent unit (B)	$ 1.80	$ 1.36
Cost of Ending WIP	$ 228,600	$ 120,904	$ 349,504

Requirement (4) Computation of Cost of units completed and transferred out

	Materials	Conversion	Total
Units completed and transferred out (A)	250,000	250,000
Cost per Equivalent unit (B)	$ 1.80	$ 1.36
Cost of Ending WIP	$ 450,000	$ 340,000	$ 790,000

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