Question

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 1 307,000 Completed and transferred to the Mixing Department ? Materials 709,250 Conversion 280,600 Inventory, May 31 ? The May 1 work in process inventory consisted of 100,000 pounds with $219,000 in materials cost and $88,000 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, 295,000 pounds were started into production. The May 31 inventory consisted of 88,000 pounds that were 100% complete with respect to materials and 70% 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.

Answer 1

Answer:

1. Grinding Department's equivalent units of production for materials and conversion in May.

materials : 395,000

conversion : 368,600

2. Grinding Department's costs per equivalent unit for materials and conversion for May.

materials : $2.35

conversion :  $1.00

3. Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.

materials : $2.35×88,000   = $206,800

conversion : $1.00×61,600 = $   61,600

Total :                                   = $268,400

4. Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

materials : $2.35×307,000    = $    721,450

conversion : $1.00×307,000 = $   307,000

Total :                                      = $1,028,450

Explanation:

1. Grinding Department's equivalent units of production for materials and conversion in May.

materials

Closing Work In Process Inventory 100% =   88,000

Completed and Transferred 100%            = 307,000

Total                                                            = 395,000

conversion

Closing Work In Process Inventory 70%   =   61,600

Completed and Transferred 100%            = 307,000

Total                                                            = 368,600

2. Grinding Department's costs per equivalent unit for materials and conversion for May.

costs per equivalent unit = Total Cost / Total equivalent units

materials  =  ( $709,250+$219,000)/395,000

                =   $2.35

conversion = ( $280,600+$88,000)/368,600

                =   $1.00

3. Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.

materials : $2.35×88,000   = $206,800

conversion : $1.00×61,600 = $   61,600

Total :                                   = $268,400

4. Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

materials : $2.35×307,000    = $    721,450

conversion : $1.00×307,000 = $   307,000

Total :                                      = $1,028,450