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:  

		Percent Completed
	Tons of Pulp	Materials		Labor and Overhead
Work in process, June 1	80,600	85	%	27	%
Work in process, June 30	51,100	45	%	13	%
Started into production during June	301,900

Required:  

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.

Answer 1

Answer:

Weighted­Average Method:

1.

	Tons of Pulp
Work in process, June 1	80600
Started into production during the month	301900
Total tons in process	382500
Deduct work in process, June 30	51100
Completed and transferred out during the month	331,400

2.

	Equivalent Units of Production
	Materials	Labor and Overhead
Units transferred out	331400	331400
Equivalent units in ending work in process inventory:
Materials: 51100 tons × 45% complete	22995
Labor and overhead:
51100 tons × 13% complete		6643
Equivalent units of production	354395	338043