Weston Products manufactures an industrial cleaning compound that goes through t

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 1 137,970 Completed and transferred to the Mixing Department Materials 630,260 215,88 Conversion Inventory, May 31 The May 1 work in process inventory consisted of 73,000 pounds with $102,930 in materials cost and $35,040 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, 394,000 pounds were started into production. The May 31 inventory consisted of 122,000 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

Explanation / Answer

Costs Charged to Production Costs of Beginning WIP          137,970 Costs incurred this period          846,140 Total Costs to account for          984,110 Total costs accounted for          984,110 Difference due to rounding cost/unit                     -   Unit Reconciliation Units to account for: Beginning WIP            73,000 Started into Production          394,000 Total units to account for          467,000 Total units accounted for Completed during the period (467,000 - 122,000)          345,000 Ending WIP          122,000 Total units accounted for          467,000 Equivalent Units of Production (EUP) - Weighted Average Method Units % Material EUP-Materials % Conversion EUP-Conversion Completed during the period          345,000 100%                  345,000 100%             345,000 Ending WIP          122,000 100%                  122,000 60%               73,200 Equivalent Units of Production (EUP)                  467,000             418,200 Cost per EUP Materials Conversion Beginning WIP                  102,930               35,040 Cost Incurred during the period                  630,260             215,880 Total Costs Costs                  733,190 Costs             250,920 Equivalent Units of Production (EUP) EUP                  467,000 EUP             418,200 Cost per Equivalent Units of Production                         1.57                    0.60 Cost Assignment and Reconciliation Costs Transferred Out EUP Cost per EUP Total Cost Direct Materials          345,000                       1.57                  541,650 Conversion          345,000                       0.60                  207,000 Total transferred Out                  748,650 Costs of Ending WIP EUP Cost per EUP Total Cost Direct Materials          122,000                       1.57                  191,540 Conversion            73,200                       0.60                    43,920 Total Ending WIP                  235,460 Total costs accounted for            984,110 Answer 1. Materials Conversion Equivalent Units of Production          467,000                418,200 Answer 2. Materials Conversion Cost per Equivalent Unit                 1.57                       0.60 Answer 3. Materials Conversion Total Cost of Ending WIP          191,540                  43,920                  235,460 Answer 4. Materials Conversion Total Cost of units Transferred out to Mixing Deptt.          541,650                207,000                  748,650

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