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Weston Products manufactures an industrial cleaning compound that goes through three processing departments Grinding, Mixing
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 Inventory, May 1 276,86 completed and transferred to the Mixing Department Materials 528,730 301,814 Conversion Inventory, May 31 The May 1 work in process inventory consisted of 109,000 pounds with $168,950 in matenals cost and $107910 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, 299,000 pounds were started into production. The May 31 inventory consisted of 99,000 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 materiais and conversion in May 3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May. g Department for materials, conversion, and in total for the Grinding Department's cost of units transferred out to the Mxin May Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the Grinding Department's equivalent units of production for materals and converson in Compute the Grinding Department's equivalent units of production for materials and Materials Conversion Equivalent units of production Required 2
Expert Solution
Answer:
1. Calculation of Equiivalent Units.
Equivalent Units.
|
Units |
Materials |
Conversion |
|
|
Units Completed |
109,000 + 299,000 – 99,000 = 309,000 |
309,000 |
309,000 |
|
Add: Closing WIP |
99,000 |
99,000 |
99,000 x 60% = 59,400 |
|
Equivalent Units |
408,000 |
368,400 |
NOTE: Under Weighted average method, units completed during the year and closing WIP completed are taken for calculating the Equivalent Units.
2. Calculation of Cost per equivalent units
| Materials | Conversion | |
| Opening Cost | 168,950 | 107,910 |
| During the month cost | 528,730 | 301,014 |
| Total Cost | 697,680 | 408,924 |
Cost of Material per equivalent unit = 697,680 / 408,000 = $1.71 per unit
Cost of Conversion per equivalent unit = 408,924 / 368,400 = $1.11 per unit
3. Grinding department ending WIP cost
Material cost of ending WIP = Cost per equivalent unit x ending WIP units
= 1.71 x 99,000 = $169,290
Conversion Cost of ending WIP = Cost per equivalent unit x ending WIP
= 1.11 x 59,400 = $65,934
Total Cost = $235,224
4. Cost of units transferred.
Materials = $1.71 x 309,000 = $528,390
Conversion = $1.11 x 309,000 = $342,990
Total Cost = $871,380
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