Question

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking....

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:

Work in Process—Grinding Department
Inventory, May 1 116,640 Completed and transferred
to the Mixing Department		 ?
Materials 575,380
Conversion 221,220
Inventory, May 31 ?

The May 1 work in process inventory consisted of 81,000 pounds with $85,860 in materials cost and $30,780 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, 461,000 pounds were started into production. The May 31 inventory consisted of 95,000 pounds that were 100% complete with respect to materials and 60% 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.

Business   Accounting   
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Answer #1

units completed and transfered out =beginning WIP +Units started - ending WIP

        = 81000+461000-95000

       = 447000 units

1)

Material conversion
Units completed and transfered out 447000 447000
Ending WIP 95000 57000         [95000*.60]
Equivalent unit 542000 504000

cost per equivalent unit

Material conversion
Beginning WIP 85860 30780
Current year cost 575380 221220
Total cost [A] 661240 252000
equivalent unit [B] 542000 504000
Cost per equivalent unit [A/B 1.22 .50

3) & 4)

Material conversion Total
Cost of ending WIP(ANS to part 3) 1.22*95000= 115900 .50*57000=28500 144400
cost of units transfered out (ANS to part 4) 1.22*447000= 545340 .50*447000= 223500 768840
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