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:

		Percent Complete
	Units	Materials			Conversion
Work in process inventory, May 1	73,000	100	%		50	%
Work in process inventory, May 31	53,000	100	%		30	%
Materials cost in work in process inventory, May 1				$	57,900
Conversion cost in work in process inventory, May 1				$	17,000
Units started into production					251,200
Units transferred to the next production department					271,200
Materials cost added during May				$	120,410
Conversion cost added during May				$	244,261

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

1.

Equivalent units of production:

		Equivalent Units
	Whole units	Material	Conversion
Units transferred to next production department	271,200	271,200	271,200
Work in process inventory, May 31	53,000	53,000	15,900 (53,000*30%)
Total	324,200	324,200	287,100

2.

Cost per equivalent unit:

	Material	Conversion
Cost in Work in process inventory, May 1	$57,900	$17,000
Cost added during May	120,410	244,261
Total costs	$178,310	$261,261
Equivalent units	324,200	287,100
Cost per equivalent units	$0.55	$0.91

3.

Cost of ending work in process inventory:

Material (53,000*$0.55)	$29,150
Conversion (15,900*$0.91)	14,469
Total costs	$43,619

4.

Cost of units transferred to the next production department:

Material (271,200*$0.55)	$149,160
Conversion (271,200*$0.91)	246,792
Total costs	$395,952