Question

Highlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below:  

1. Compute the number of tons of pulp completed and transferred out during June.

2. Compute the equivalent units of production for materials and for labor and overhead for June.

		Percent Completed
	Tons of Pulp	Materials	Labor and Overhead
Work in process, June 1	81,900	86%	24%
Work in process, June 30	50,700	45%	12%
Started into Production during June	300,700

Answer 1

1.) Calculation of units completed and transferred out:-

Opening WIP	81,900
(+) Units started in production	300,700
(-) Closing WIP	(50,700)
Units completed and transferred out	331,900

2.) Equivalent units of production:-

	Physical units	Material	Labor and overhead
WIP, June 30	50,700	50,700 x 45% = 22,815	50,700 x 12% = 6,084