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	81,000	88	%	28	%
Work in process, June 30	51,300	49	%	15	%
Started into production during June	300,700

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

Weighted­Average Method:

1.

	Tons of Pulp
Work in process, June 1	81,000
Started into production during the month	300,700
Total tons in process	381,700
Deduct work in process, June 30	51,300
Completed and transferred out during the month	330,400

2.

	Equivalent Units of Production
	Materials	Labor and Overhead
Units transferred out	330,400	330,400
Equivalent units in ending work in process inventory:
Materials: 51,300 tons × 49% complete	25,137
Labor and overhead:
51,300 tons × 15% complete		7,695
Equivalent units of production	355,537	338,095