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Homework answers / question archive / Exercise 5-8 Equivalent Units; Cost per Equivalent Unit; Assigning Costs to Units-Weighted-Average Method [LO5-2, LO5-3, LO5-4] Helix Corporation uses the weighted-average method in its process costing system
Exercise 5-8 Equivalent Units; Cost per Equivalent Unit; Assigning Costs to Units-Weighted-Average Method [LO5-2, LO5-3, LO5-4]
Helix Corporation uses the weighted-average method in its process costing system. It produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow:
| Percent Complete | ||||||
| Units | Materials | Conversion | ||||
| Work in process inventory, May 1 | 75,000 | 100 | % | 50 | % | |
| Work in process inventory, May 31 | 55,000 | 100 | % | 30 | % | |
| Materials cost in work in process inventory, May 1 | $ | 59,400 | ||||
| Conversion cost in work in process inventory, May 1 | $ | 17,400 | ||||
| Units started into production | 252,000 | |||||
| Units transferred to the next production department | 272,000 | |||||
| Materials cost added during May | $ | 126,990 | ||||
| Conversion cost added during May | $ | 250,905 | ||||
Required:
1. Calculate the first production department's equivalent units of production for materials and conversion for May.
2. Compute the first production department's cost per equivalent unit for materials and conversion for May.
3. Compute the first production department's cost of ending work in process inventory for materials, conversion, and in total for May.
4. Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May.
Solution 1:
| Computation of Equivalent unit of Production - Weighted Average - First Production Department | |||
| Particulars | Physical Units | Material | Conversion |
| Unit completed & Transferred out | 272000 | 272000 | 272000 |
| Closing WIP: | 55000 | ||
| Material (100%) | 55000 | ||
| Conversion (30%) | 16500 | ||
| Equivalent units of production | 327000 | 327000 | 288500 |
Solution 2:
| Computation of Cost per equivalent unit of Production - Weighted Average - First Production Department | ||
| Particulars | Material | Conversion |
| Opening WIP | $59,400.00 | $17,400.00 |
| Cost Added during period | $126,990.00 | $250,905.00 |
| Total cost to be accounted for | $186,390.00 | $268,305.00 |
| Equivalent units of production | 327000 | 288500 |
| Cost per Equivalent unit | $0.57 | $0.93 |
Solution 3 & 4:
| Computation of Cost of ending WIP and units completed & transferred out - Weighted Average - First Production Department | |||
| Particulars | Material | Conversion | Total |
| Equivalent unit of Ending WIP | 55000 | 16500 | |
| Cost per equivalent unit | $0.57 | $0.93 | |
| Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) | $31,350 | $15,345 | $46,695 |
| Units completed and transferred | 272000 | 272000 | |
| Cost of units completed & Transferred (Unit completed * cost per equivalent unit) | $155,040 | $252,960 | $408,000 |
